Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please show all calculations, I am really struggling to complete this question. Thank you!! Peterson Electronics uses a decentralized collection system whereby customers mail their
Please show all calculations, I am really struggling to complete this question. Thank you!!
Peterson Electronics uses a decentralized collection system whereby customers mail their payments to one of six regional collection centers. The checks are. deposited each working day in the collection center's local bank, and a depository transfer check for the amount of the deposit is mailed to the firm's concentration bank in New York. On average, 8 days elapse between the time the checks are deposited in the local bank and the time the funds become collected funds (and available for disbursements) at the concentration bank. Peterson is considering using wire transfers instead of depository transfer checks moving funds from the six collection centers to its concentration bank, Wire transfers would reduce the elapsed time by 4 days. Depository transfer checks cost 50.50 (including postage), and wire transffirs cost \$12. Assume there are 250 working days per year, Peterson can earn 10 percent before taxes on any funds that are released through more efficient collection techniques. Assume that there are 365 days per year. Determine the net (pretax) benefit to Peterson of using wire trensfers if annual sales are: a. $11 million, Round your answer to the nearest dollar. Enter your answer in whole dollars. For example, an answer of $1.20 million should be entered as 1,200,000 not 1.20 . s b. $61 million. Round your answer to the nearest dollar. Enter your answer in whole dollars. For example, an answer of $1.20million should be entered as 1,200.000 not 1.20 . 5 Suppose Peterson is considering using electronic depository transfer checks, rather than mail depository transfer checks, to move funds from its six collection centers to its concentration bank. Electronic depository transfer checks would reduce collection time by 3 days and would cost $3.50 each. Determine the net (pretax) beneft to Peterson of using electronic depository transfer checks if annual sales are: c. 511 miltion. Round your answer to the nearest dollar, Enter your answer in whole dollars. For example, an answer of $1.20 million should be entered as 1,200,000 not 1.20 . s d. $61 million, Round your answer to the nearest dollar. Enter your answer in whole dollars. For example, an answer of $1.20 million should be entered as 1,200,000 not 1.20 . 5 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started