The Fast Reader Company supplies bulletin board services to numerous hotel chains nationwide. The owner of the firm is investigating the desirability of employing a billing firm to do her billing and collections. Because the billing firm specializes in these services, collection float will be reduced by

10

days. Average daily collections are

$7,700,

and the owner can earn

7.4%

annually (expressed as an APR with monthly compounding) on her investments. If the billing firm charges

$300

per month, should the owner employ the billing firm?

Question content area bottom

Part 1

Assuming the billing firm can reduce the collection float immediately, as soon as Fast Reader starts the service they will receive

$77,00077,000.

(Round to the nearest dollar.)

Part 2

The present value of the billing firm's charges is

$enter your response here.

(Round to the nearest dollar.)

Part 3

Fast Reader

should not

should

employ the billing firm. (Select from the drop-down menu.)