Question
Note: When converting annual data to daily data or vice versa in these problems, assume there are 365 days per year. Problem 1: The White
Note: When converting annual data to daily data or vice versa in these problems, assume there are 365 days per year.
Problem 1:
The White Oak Companys annual sales are $219 million. An average of 9 days elapses between when a customer mails its payment and when the funds become usable by the firm.
a.If the company could speed up the collection of funds by 2 days, what would be the increase in the firms average cash balance?
b.Assuming that these additional funds can be invested in marketable securities that yield 7 percent per year, determine the increase in White Oaks annual (pretax) earning
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