Lockbox and concentration banking

Assignment Help Finance Basics

Reference no: EM1358493

Anthony Marino, CFO of Thousand Years Inc., is evaluating two alternatives of float management: lockbox and concentration banking. The average number of daily payments to lockboxes is 250 with the average size of each payment at $7,500.The lockbox system can reduce the collection float by 1.5 days and concentration banking can reduce the collection float by 1 day. However, the bank charges an annual fee of $30,000 and $0.30 per check processed for the lockbox service .Which method is more economical for Thousand Years, the lockbox system or the concentration-banking system? Assume daily interest on Treasury bills is 0.03 percent.

Reference no: EM1358493

Questions Cloud

Explain five steps to reduce network costs : Are there any additional steps that are not on this list? Which of these do you feel have the largest impact on a given network project?

Percentage of sales and percentage of receivables : What is the difference between using the percentage of sales and percentage of receivables method for calculating doubtful accounts? Is it appropriate to use a hybrid of the percentage of sales and the percentage of receivables methods of calculat..

What is the x-coordinate relative to its firing point : An electron moves at a speed of 480m/s perpendicular to the direction of the uniform magnetic field of 1 T. What is the radius of the electron's circular orbit in units of nanometers (1 m = 109 nm)

Sustainability within the manufacturing industry : impact and improve positive impact and sustainability of the environment and resources. Research and find at least four appropriate references.

Lockbox and concentration banking : Anthony Marino, CFO of Thousand Years Corporation, is evaluating two alternatives of float management: lockbox and concentration banking. The average number of daily payments to lockboxes is 250 with the average size of each payment at $7,500.

Causes and treatment of add or adhd : Is there a simple test to diagnose ADD/ADHD? What is involved in the diagnostic process? Can you provide me with some good links for further research on the causes and treatment of ADD/ADHD?

Funding new business ventures : What are the main financing options for a new business venture? What are the advantages and disadvantages of each financing option?

Analyze network security threats and vulnerabilities : Given the need for secure, online business communications, analyze network security threats and vulnerabilities and design network security solutions

Conduct a cursory search of integrative medicine : Integrative medicine - Conduct a cursory search of Integrative Medicine (IM) in your geographical area and choose one type to provide a brief summary.

User Account

All Pages