Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help with this one question please help, I only need help with question C. I already completed the other two. Anne Teak, the

I need help with this one question please help, I only need help with question C. I already completed the other two.

Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 850 payments a day will be made to lock boxes with an average payment size of $2,000. The banks charge for operating the lock boxes is $0.30 a check. The interest rate is 0.010% per day.

A. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system.

Note: Do not round intermediate calculations.

B. Is it worthwhile to adopt the system?

C. What minimum reduction in the time to collect and process each check is needed to justify use of the lock-box system?

Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

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_2

Step: 3

blur-text-image_3

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

Food And Beverage Cost Control

Authors: Lea R. Dopson, David K. Hayes, Jack E. Miller

4th Edition

0471694177, 978-0471694175

More Books

Students also viewed these Accounting questions

Question

2. What abilities are possible because humans use symbols?

Answered: 1 week ago

Question

1. How are language and thought related?

Answered: 1 week ago

Question

4. How do rules guide verbal communication?

Answered: 1 week ago