Your banker has analyzed your company account and has suggested that her bank has a cash management package for you. She suggests that with a concentration banking system, your float can be reduced by three days on average. You, of course, are delighted (you're not sure why), but you do know your average daily collections amount to $335,000. Your opportunity cost of funds is 9 percent The bank provides this service for $55,500 plus a compensating balance in your current account of $78,000. (A compensating balance is the amount you are required to maintain Interest free at that bank.) a. Is this package worth it? Yes O No b. By how much? (Negative answer should be indicated by a minus sign.) Annual Saving Sanders' Prime Time Lighting Co. has credit sales of $1,980,000 and accounts receivable of $286.000. Compute the value for the average collection period. (Use 365 days in a year. Do not round Intermediate calculations. Round the final answer to the nearest whole number.) Average collection period days Sheila's Society Clothing Manufacturer has collection centres around the country to speed up cash collections. The company makes its disbursements from remote disbursement centres, so cheques written by Sheila's take longer to dear the bank Collection time has been reduced by two days and a half days and disbursement time has been increased by one and a half days because of these policies. Excess funds are being invested in short-term instruments yielding 6 percent per annum a. If the firm has $4.00 million per day in collections and $3.00 million per day in disbursements, how many dollars has the cash management system freed up? (Enter the answer in dollars not in millions.) Freed-up funds b. How much can Sheila's earn per year on short-term investments made possible by the freed up cash? (Enter the answer in dollars not in millions.) Interest on freed-up cash $ Lett's commercial paper is currently selling at a discount. It sells for 97.39 of par and matures in 100 days. (Use 365 days a year. Do not round intermediate calculations. Round the final answers to 2 decimal places.) a. Calculate its yield as quoted in the market, Yield %6 b. Calculate its effective annual yleld. Effective annual yield 96