Establishment of local collection centers

Assignment Help Accounting Basics

Reference no: EM13761266

Norma's Cat Food of Shell Knob ships cat food throughout the country. Norma has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by two and one-half days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Iowa.

If the company has $5 million per day in collections and $3 million per day in disbursements, how many dollars will the cash management system free up? Justify your answers.
If the company can earn 8 percent per annum on freed-up funds, how much will the income be? Justify your answers.
If the annual cost of the new system is $800,000, should it be implemented? Explain why or why not.

Reference no: EM13761266

Questions Cloud

Data protection and security : Discuss ways that the IT organization can counter the negative impacts of social networking. Explain how the IT organization can maintain an ethical posture while managing organizational behavior related to social networking.

Identifying and describing hr challenge : Paragraph or two identifying and describing your first HR challenge, the reasons for the challenge and your plan for addressing the challenge.

Conducting a routine annual inspection of the plane : Plaintiff, Heath Benjamin (Benjamin), found more than $18,000 in currency inside the wing of an airplane. At the time of this discovery, State Central Bank (State) owned the plane and it was being serviced by Lindner Aviation, Inc. (Lindner). Benjami..

Perform a high-level analysis of four major domains of cobit : From the e-Activity, perform a high-level analysis of the four major domains of COBIT. (Keep in mind that COBIT is intended to make sure that IT provides the systematic rigor needed for the strong internal controls and Sarbanes-Oxley compliance.)

Establishment of local collection centers : Norma's Cat Food of Shell Knob ships cat food throughout the country. Norma has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by two and one-half days.

Assume production and demand occur at constant rates : Decided to set up a small production facility in Sydney to sell to local restaurants that want to offer gelato on their dessert menu. To start simple, he would offer only three flavors of gelato: fragola (strawberry), Chocolato (chocolate), and bacio..

Problems related to radio waves : Based on what we have studied about electrical charges and separations, which of the following are attracted to each other the strongest.

Compare and contrast risk identification techniques : Compare and contrast risk identification techniques and describe how these could improve the planning and mitigation of potential hazards

Business dispute regarding employee compensation : Conduct research online and explain a business situation where there is a business dispute regarding employee compensation.

User Account

All Pages