CG Beadix has daily average check collections of $101289, and it takes the firm 6 days...
CG Beadix has daily average check collections of $101289, and it takes the firm 6 days before it can completely process those checks. An automated lockbox system that costs $303465 a year would reduce the processing time to 3 days. Beadix's opportunity cost of short-term funds is 12%. What is the net pretax benefit of the change? Round to the nearest dollar. Make sure to include a negative sign if it is negative.
Homework Answers
AMount of funds released = Daily check amount*Days float reduced
= 101289*(6-3) = 303867
Opportunity cost of funds (Benefit) = 12%*303867 = 36464
Net pretax benefit = Benefit from the system- cost
= 36464-303465
= - 267001
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CG Beadix has daily average check collections of $101289, and it
takes the firm 6 days...
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