About six days to receive and deposit checks from customers

Assignment Help Financial Management

Reference no: EM13938501

It takes Cookie Cutter Modular Homes, Inc., about six days to receive and deposit checks from customers. Cookie Cutter’s management is considering a lockbox system to reduce the firm’s collection times. It is expected that the lockbox system will reduce receipt and deposit times to three days total. Average daily collections are $140,000, and the required rate of return is 6 percent per year. Assume 365 days per year. a. What is the reduction in outstanding cash balances as a result of implementing the lockbox system? Cash balance reduction $ b. What is the daily dollar return that could be earned on these savings? (Round your answer to 2 decimal places. (e.g., 32.16)) Dollar return $ c-1 What is the maximum monthly charge Cookie Cutter should pay for this lockbox system if the payment is due at the end of the month? (Round your answer to 2 decimal places. (e.g., 32.16)) Maximum monthly charge $ c-2 What is the maximum monthly charge Cookie Cutter should pay for this lockbox system if the payment is due at the beginning of the month? (Round your answer to 2 decimal places. (e.g., 32.16)) Maximum monthly charge $

Reference no: EM13938501

Questions Cloud

What physically connects, or bridges, the two parts : The entire process of coordinated, voluntary, muscle contraction is summed up as excitation-contraction coupling. Why are these two things coupled, and what, specifically, is responsible for bring excitation and contraction together in the muscle ..

Why would that cause a physiological change : Why would administering bicarbonate to a patient be advisable if his blood pH was too low? What is the bicarbonate going to do to adjust the pH of the blood?

You report statistical data in this article : The article should follow similar headings to your abstract (the first four only) though you may have additional subheadings specific to your topic. It is not expected that you report statistical data in this article. You can however provide a cri..

Why muscle action potentials only the result of excitation : How do voltage-gated calcium channels relate to electrical activity of the neuronal vs. sarcolemmal membrane? Concentrate on the differences. Keep your answer brief (3-4 sentences).

About six days to receive and deposit checks from customers : It takes Cookie Cutter Modular Homes, Inc., about six days to receive and deposit checks from customers. Cookie Cutter’s management is considering a lockbox system to reduce the firm’s collection times. It is expected that the lockbox system will red..

Implement the chinese remainder theorem : This program must run in the Visual C++.NET. Some time I have problem with that, so, please the whole project included in the attached Zip file.

Are the proposed actions of ed and robin ethical : Are the proposed actions of Ed and Robin ethical? What is the likely effect of their actions on shareholder value?

Report for advanced control : Abstract- These instructions give you guidelines for preparing your report for Advanced Control and are based on the templates used for scientific publications. Use this document as a template if you are using Microsoft Word.

Determine the current ratio after accounting for information : Determine the current ratio after accounting for the additional information. Explain why ABC's current ratio deteriorated so badly.

User Account

All Pages