6. Problem 15.09 (Lockbox System) eBook Fisher-Gardner Corporation (FGC) began operations 5 years ago as a small firm serving customers in the Chicago area. However, its reputation and market area grew quickly. Today FGC has customers all over the United States. Despite its broad customer base, FGC has maintained its headquarters in Chicago, and it keeps its central billing system there. On average, it takes 4 days from the time customers mail in payments until FGC can receive, process, and deposit them. FGC would like to set up a lockbox collection system, which it estimates would reduce the time lag from customer mailing to deposit by 2 days-bringing it down to 2 days. FGC receives an average of $1,800,000 in payments per day. a. How much free cash would FGC generate if it implemented the lockbox system? Enter your answer as a positive number. Round your answer to the nearest dollar. Would this be a one-time cash flow or a recurring one, assuming the company ceases to grow? -Select- How would growth affect your answer? If the firm grows, cash flow -Select- b. If FGC has an opportunity cost of 7%, how much is the lockbox system worth on an annual basis? Round your answer to the nearest dollar.
6. Problem 15.09 (Lockbox System) eBook Fisher-Gardner Corporation (FGC) began operations 5 years ago as a small firm serving customers in the Chicago area. However, its reputation and market area grew quickly. Today FGC has customers all over the United States. Despite its broad customer base, FGC has maintained its headquarters in Chicago, and it keeps its central billing system there. On average, it takes 4 days from the time customers mail in payments until FGC can receive, process, and deposit them. FGC would like to set up a lockbox collection system, which it estimates would reduce the time lag from customer mailing to deposit by 2 days-bringing it down to 2 days. FGC receives an average of $1,800,000 in payments per day. a. How much free cash would FGC generate if it implemented the lockbox system? Enter your answer as a positive number. Round your answer to the nearest dollar. Would this be a one-time cash flow or a recurring one, assuming the company ceases to grow? -Select- How would growth affect your answer? If the firm grows, cash flow -Select- b. If FGC has an opportunity cost of 7%, how much is the lockbox system worth on an annual basis? Round your answer to the nearest dollar.
Pkg Acc Infor Systems MS VISIO CD
10th Edition
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:Ulric J. Gelinas
Chapter17: Acquiring And Implementing Accounting Information Systems
Section: Chapter Questions
Problem 1SP
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