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DATA INPUTS U. S. Bank Wells Fargo Rate on money market investments 3.14% 3.14% Average Customer payment $2,145 $2,145 Average number of payments per day
| DATA INPUTS | ||
| U. S. Bank | Wells Fargo | |
| Rate on money market investments | 3.14% | 3.14% |
| Average Customer payment | $2,145 | $2,145 |
| Average number of payments per day | 81 | 81 |
| Annual fee | $16,800 | $5,100 |
| Cost per transaction | $0.11 | $0.16 |
| Reduction in collection time | 4 | 2 |
| The questions that the CEO needs you to answer are as follows: | ||
| (a) What is the Net Present Value (NPV) of each of the new lockbox system proposals (including the annual fixed charge)? (Round to the nearest whole dollar) | ||
| (b) How many customers are needed, on average each day, to make each of the lockbox systems break-even? (Round to the nearest whole customer) | ||
| (c) Which is the Preferred Lockbox System for Global Manufacturing, Inc.? (U.S. Bank or Wells Fargo) | ||
| (d) How much of a reduction in accounts receivable should Global expect from the Preferred Lockbox System if implemented in 2020? (Round to the nearest whole dollar) | ||
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Accounts And Audit Of Limited Liability Partnerships
Authors: Steve Collings
4th Edition
1847669913, 978-1847669919
