General Products writes checks that average $33,000 daily. These checks take an average of 6 days to clear. It receives payments that average $35,000 daily. It takes 3 days before these checks are available to the firm. What would be the annual savings if General Products could obtain access to the payments it receives within 2 days? The interest rate is 5% per year. (Do not round intermediate calculation

General Products writes checks that average $33,000 daily. These checks take an average of 6 days to clear. It receives payments that average $35,000 daily. It takes 3 days before these checks are available to the firm. What would be the annual savings if General Products could obtain access to the payments it receives within 2 days? The interest rate is 5% per year. (Do not round intermediate calculation

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 11P

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You plan to make five deposits of $1000 each, one every 6 months, with the first payment being made in 6 months. You will then make no more deposits. If the bank pays 4% nominal interest, compounded semiannually, how much will be in your account after 3 years? One year from today you must make a payment of %10,000. To prepare for this payment, you plan to make two equal quarterly deposits (at the end of Quarters 1 and 2) in a bank that pays 4% nominal interest compounded quarterly. How large must each of the two payments be? Note: Please show formula and solution ( not in excel). Show manual calculation
On an average day, Town Center Hardware receives $2,420 in checks from customers. These checks clear the bank in an average of 2.1 days. The applicable daily interest rate is 0.025 percent. What is the maximum amount this store should pay to completely eliminate its collection float? Assume each month has 30 days.
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