Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Asif Co. has annual sales of Rs.9m (all credit). On Average, it takes five days for a check to be deposited. Asif believes that he

Asif Co. has annual sales of Rs.9m (all credit). On Average, it takes five days for a check to be deposited. Asif believes that he can reduce thus float time by two days through the use of lock box. The bank will charge a flat fee of Rs.4,000 PA to perform this service. Assume 360 days in a year. Required: Suppose that the opportunity cost is 10%. Should Asif enter into the lock box agreement? How much will be the days saved to be organization on no profit & no loss (breakeven) Situation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quality Control Procedure For Statutory Financial Audit An Empirical Study

Authors: Siddhartha Sankar Saha, Mitrendu Narayan Roy

1st Edition

1787142272, 9781787142275

More Books

Students also viewed these Accounting questions

Question

=+how might their legitimacy be improved?

Answered: 1 week ago