What is the maximum annual expense

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Question - Garner Products is considering a new accounts payable and cash disbursement process which is projected to add 3 days to the disbursement schedule without having significant negative effects on supplier relations. Daily cash outflows average $1,500,000. Garner is in a short-term borrowing position for 8 months of the year and in an investment position for 4 months. On an annual basis, bank lending rates are expected to average 7% and marketable securities yields are expected to average 4%. What is the maximum annual expense that Garner could incur for this new process and still break even?

Reference no: EM132939957

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