Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Proposal #2 would establish local collection centers throughout the region to decrease the time it takes to convert credit payments that are mailed in by

Proposal #2 would establish local collection centers throughout the region to decrease the time it takes to convert credit payments that are mailed in by check to cash. It is estimated that establishing these collection centers would reduce the average collection time by 3 days.

  1. If the company currently averages $30,000 in collections per day, how many dollars will this suggested cash management system frees up?

  1. If all freed up dollars would be used to pay down debt that has an interest rate of 6%, how much money could be saved each year in interest expense?

  1. Do the numbers suggest that this new system should be implemented if its total annual cost is $4800? Explain.

**Please show work**

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

Introductory Econometrics For Finance

Authors: Chris Brooks

3rd Edition

1107661455, 9781107661455

More Books

Students also viewed these Finance questions