User Account

All Pages

How much money could be saved each year in interest expense

Assignment Help Financial Accounting
Reference no: EM132478705

Proposal would establish local collection centers throughout the region to decrease the time it takes to convert credit payments that are mailed in by check to cash. It is estimated that establishing these collection centers would reduce the average collection time by 2 days (from 5 days to 3 days).

Question 1) If the company currently averages $20,000 in collections per day, how many dollars will this suggested cash management system frees up?

$20,000 x 2 = $40,000

Question 2) If all freed up dollars would be used to pay down debt that has an interest rate of 8%, how much money could be saved each year in interest expense?

$40,000 x 8% = $1,600

Question 3) Do the numbers suggest that this new system should be implemented if its total annual cost is $5200? Explain.

  • No, the new system should not be implemented. The calculated savings are $3,600 less than the annual cost of $5,200.

Reference no: EM132478705

Questions Cloud

What is the interest expense to be recognized for year two : The bond is issued for 90 percent of face value ($72,000) to yield an annual rate of 8 percent. What is the interest expense to be recognized for Year Two
How is monopolistic competition similar : How is monopolistic competition similar to each of the following market structures?
How cost of security controls implementation was justified : In 80 words or more give an example of a cost analysis conducted within your organization, and how the cost of security controls implementation was justified?
Create the virtual domain of the m-shaped tensile test : Create the virtual domain of the M-shaped tensile test specimen in an appropriate software of your choice. Create a nodal set for the gauge sections of the test
How much money could be saved each year in interest expense : If all freed up dollars would be used to pay down debt that has an interest rate of 8%, how much money could be saved each year in interest expense?
Discussion about the risk tolerance : In 80 words or more give an example of risk tolerance documents and how it has shaped the IT security model within your organization?
Draw a correctly labeled graph for a monopoly : a) Draw a correctly labeled graph for a monopoly and show each of the following.
Determine the dividends per share for preferred stock : Sabas Company has 20,000 shares of $100 par, Determine the dividends per share for preferred and common stock for the third year.
Does the first amendment apply only to spoken words : Does the First Amendment apply only to spoken words? Why are common carriers prohibited from controlling the content of the material they carry?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd