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Currently Rogers Corporation is using a decentralized collection system whereby customers mail their checks to one of the firms ten regional locations. Its annual sales

Currently Rogers Corporation is using a decentralized collection system whereby customers mail their checks to one of the firms ten regional locations. Its annual sales are $200 million. Checks are deposited each business day in a local bank and the amount of the deposit is sent to the firms concentration bank in Dallas. The average time between deposit in the local bank and the availability of those funds, in Dallas, to Rogers is 5 days. Rogers has determined that the use of wire transfers would reduce the float by three days, but the transfer will cost $25.00. If transfers will be made on each of the 250 days that banks are open, should Rogers switch to the wire transfer system? Assume that Rogers can earn 6% on the funds released through this more efficient transfer.

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