How many dollars will the cash management system free up

Assignment Help Financial Management

Reference no: EM13932893

Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by three 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 Florida. A) If Neon Light Company has $2.15 million per day in collections and $1.03 million per day in disbursements, how many dollars will the cash management system free up? B) If Neon Light Company can earn 6 percent per annum on freed-up funds, how much will the income be?

Reference no: EM13932893

Questions Cloud

What is the value of the investment : If you put up $43,000 today in exchange for a 9.7 percent, 10-year annuity, what will the annual cash flow be? What is the value of the investment? What would the value be if the payments occurred for 38 years? What would the value be if the payments..

What is the present value of your windfall : Suppose you are committed to owning a $160,000 Ferrari. If you believe your mutual fund can achieve a 10.25 percent annual rate of return, and you want to buy the car in 10 years on the day you turn 30, how much must you invest today? What is the pr..

Find probability that amount of coffee is less than twelve : find the probability that the amount of coffee is less than 12.0 oz, between 11.2 oz and 12.7 oz, greater than 12.2 oz and between 11.9 oz and 12.0 oz.

Business development team at waitrose : Following the acquisition of Distell by Diageo the business development team at Waitrose is proposing the company purchase Distell's South African wine assets for 47 million. Your job is to evaluate the acquisition of the plant at the proposed pri..

How many dollars will the cash management system free up : Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by three ..

Service training manual for a service organisation : Develop a basic customer service training manual for a service organisation of your choice. The organisation should be in the tourism, hospitality, retail, personal services and sport or recreation industry.

What is the unlevered cash flow : Whitewater Inc. has a debt of 20,000,000 Euro and the value of levered equity is 14,500,000 Euro. The company keeps a constant debt policy. Also the company has a constant and perpetual EBITDA. Knowing that the corporate tax rate is 36% and that the ..

Equipment is depreciated straight-line to zero book value : Thornley Machines is considering a 3-year project with an initial cost of $720,000. The project will not directly produce any sales but will reduce operating costs by $410,000 a year. The equipment is depreciated straight-line to a zero book value ov..

User Account

All Pages