a-c

(Cash manegement) As CFO of Portobello Scuba Diving Inc., you are asked to look info the possibility of implementing a system to expedite cash receipts from clientis. Portobello recelves check remittances totaling $26 million in a yeat. The firm records and processes 15,000 checks in the same period. The National Bank of Brazil has informed you that it could provide the service of expediting checks and associated documents for a unit cost of $0.35 per check. Attor conducting an analysis, you project that the cash freed up by the adoption of the system can be invested in a portfolio of near-cash assets that will yield an annual belore-tax return of 9 percent. The company usually uses a 365-day year in its financial calculations. a. What reduction in check collection time is necessary for Portobello to bo nether better nor worse off for having adopted the proposed system? b. How would your solution to part a be affected if Portobello could invest the freed up balances at an expected annual retum of only 5 percent? c. What is the logical explanation for the diflerences in your answers to part a and part b? a. What reduction in check collection time is necessary for Portobelo to be neither better nor wonse off for having adopted the proposed system? days (Round to three decimad places.)