BC Corporation was approached by bank. The latter promised that it can speed up the check clearing process to 2 days for a monthly fee of P500. ABC currently deposits 30 check daily with an average value of P2,000. The current clearing process takes 6 days. ABC can earn 6% on money marketable securities. How much is the net advantage or (disadvantage) if ABC accepts the bank’s offer
BC Corporation was approached by bank. The latter promised that it can speed up the check clearing process to 2 days for a monthly fee of P500. ABC currently deposits 30 check daily with an average value of P2,000. The current clearing process takes 6 days. ABC can earn 6% on money marketable securities. How much is the net advantage or (disadvantage) if ABC accepts the bank’s offer
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 24P
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ABC Corporation was approached by bank. The latter promised that it can speed up the check clearing process to 2 days for a monthly fee of P500. ABC currently deposits 30 check daily with an average value of P2,000. The current clearing process takes 6 days. ABC can earn 6% on money marketable securities.
How much is the net advantage or (disadvantage) if ABC accepts the bank’s offer?
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