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A proposal, however, from the First Pennsylvania Bank aimed at speeding up cash collections is being examined by several of Pierce's corporate executives. remittance checks
A proposal, however, from the First Pennsylvania Bank aimed at speeding up cash collections is being examined by several of Pierce's corporate executives. remittance checks take an average of 6 business days to reach the head office. Once in Philadelphia, another 1 days are required to process the checks for ultimate deposit at the First Pennsylvania Bank. The firm's daily remittances average $1.2 million. The average check size is $1,000. Pierce Designs currently earns 12 percent annually on its marketable-securities portfolio. through the proposed cash collection system will cost $0.21. a. What amount of cash balances will be freed up if Peggy Pierce Designs Inc. adopts the system suggested by First Pennsylvania? b. What is the opportunity cost of maintaining the current banking setup? c. What is the projected annual cost of operating the proposed system? d. Should Pierce adopt the new system? Compute the net annual gain or loss associated with adopting the system. a. What amount of cash balances will be freed up if Peggy Pierce Designs Inc. adopts the system suggested by First Pennsylvania? (Round to the nearest dollar.) A proposal, however, from the First Pennsylvania Bank aimed at speeding up cash collections is being examined by several of Pierce's corporate executives. remittance checks take an average of 6 business days to reach the head office. Once in Philadelphia, another 1 days are required to process the checks for ultimate deposit at the First Pennsylvania Bank. The firm's daily remittances average $1.2 million. The average check size is $1,000. Pierce Designs currently earns 12 percent annually on its marketable-securities portfolio. through the proposed cash collection system will cost $0.21. a. What amount of cash balances will be freed up if Peggy Pierce Designs Inc. adopts the system suggested by First Pennsylvania? b. What is the opportunity cost of maintaining the current banking setup? c. What is the projected annual cost of operating the proposed system? d. Should Pierce adopt the new system? Compute the net annual gain or loss associated with adopting the system. a. What amount of cash balances will be freed up if Peggy Pierce Designs Inc. adopts the system suggested by First Pennsylvania? (Round to the nearest dollar.)
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