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Currently ABC Industry is using a decentralized collection system whereby customers mail their checks to one of the firm's eight regional locations. Its annual sales

Currently ABC Industry is using a decentralized collection system whereby customers mail their checks to one of the firm's eight regional locations. Its annual sales are $50 million. Checks are deposited each business day in a local bank, and the amount of the deposit is sent to the firm's concentration bank in Dallas. The average time between deposit in the local bank and the availability of those funds, in Dallas, to ABC Industry is 6 days. ABC Industry has determined that the use of wire transfers would reduce the float to 4 days. If transfers will be made on the 150 days that banks are open each year, should ABC Industry switch to the wire transfer system? Why or why not? Assume that ABC Industry can earn 5% on the funds released through this more efficient transfer.

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