What rio company net annual benefit is

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Rio Company's average monthly cash receipts is P1,500,000. Its average collection period is ten (10) days. A collection agency has offered to be the company's collector and shorten collection period to four (4) days for a monthly fee of P1,500. The company can invest its excess funds in money market placement at a rate of 8%.

Question 1: If the collection agency's offer is accepted, Rio Company's net annual benefit (loss) is

Reference no: EM132579222

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