a-b

(Csth recepts acceleration system) Peggy Pierce Designs ine is a vertically integratod, national manufacturer and retaler of women's clothing. Currently, the firm has no coordinated The firm currently uses a centralized biling procedure, which requires that all checks be maled to he Philudelphla head ofice for processing and eventual depost. Under this arrangement, alt the customers' remittance checks take an averago of 6 business days to reach the head office. Once in Philadelphia, another 2 days are required to process the checks for utimate deposit at the First Pennsytrania Bank Under the proposed plan, First Pennsywania said that they could reduce funds tied up by mal float to 4 days, and processing float wal be olininated. Funds would then be trensferred twice each business day by means of aulomated deposilory transfer checks from local banks to the Finst Pennsytvania Bank. Each DTC costs 517 , These transters wa occur al 270 betsiness days of the year. Each check processed through the proposed cash collection system will cost $0.29. a. Whut amount of cash balances will be freed up if Pegoy Pierce Designs Inc. adopts the system suggested by Finh Pennaylvania? b. What is the oobortunitv cost of maintainine the current banisina setub? a. What amount of cash batances wa be freed up if Peggy Piecce Designs thc, adopts the syatem suggested by First Pennsyvana? (Round to the nearest doliar)