Reference no: EM133059924

Question - M Hobbies Pty Ltd (MH) operates a network of four radio control hobby outlets in the states of New South Wales and Victoria in Australia. At the end of each working day, sale proceeds for every outlet are banked in cash deposit machines into the account of head office in Sydney. The monies are then credited at the start of the next day in the morning. Labour costs associated with banking in monies 5 days a week amounted to $725 last year. To cater for hobbyists, who are often visit the stores on weekends, MH outlets are closed on less busy Wednesdays and Thursdays. Sales at the four shops totalled $416,000 last year, at a constant daily rate. MH's bank charges an overdraft rate of 18.25 percent. The company's return on investment return is 15 percent. The Finance manager of MH is considering banking all sales proceeds once a week, on Monday evening. Conduct a cost-benefit analysis on this procedure and make a reasoned recommendation to MH.