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![Requirement-1: # of days in mail for customer payment # of days in process for customer payment # of days in clearance for customer payment Total collection float (days) 2.5 6.5 [2.0 2.0+2.5] Requirement-2: Reduction in number of days of collections Average number of payments per day Average value of payment Present value of adopting the lockbox system Firms opportunity cost Savings from adopting lockbox systenm Cost of adopting lockbox system Net Savings from adopting lockbox system 1 $65,000 $195,000 [3 days x 1 x $65,000] 9% $17.550 I$195,000 x 9%] $16,500 $1,050[$17,550 $16,500] Therefore, it would be economically advisable for the firm to pay an annual fee of $16,500 for lockbox system.](http://img.homeworklib.com/questions/e9dff320-474e-11ea-9ef3-9182b3ff6066.png?x-oss-process=image/resize,w_560)
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P15-14 (book/static) Question Help Float Simon Corporation has daily cash receipts of $65,000. A recent analysis...
P15-14 (book/static) E Question Help Float Simon Corporation has daily cash receipts of $65,000. A recent...
P15-14 (book/static) E Question Help Float Simon Corporation has daily cash receipts of $65,000. A recent analysis of its collections indicated that customers' payments were in the mail an average of 2 days. Once received, the payments are processed in 2 days. After payments are deposited, it takes an average of 2.5 days for these receipts to clear the banking system a. How much collection float (in days) does the firm currently have? b. If the firm's opportunity cost is...
Float Simon Corporation has daily cash receipts of $65,000. A recent analysis of its collections indicated...
Float Simon Corporation has daily cash receipts of $65,000. A recent analysis of its collections indicated that customers' payments were in the mail an average of 2.5 days. Once received, the payments are processed in 2.5 days. After payments are deposited, it takes an average of 2 days for these receipts to clear the banking system. a. How much collection float (in days) does the firm currently have? b. If the firm's opportunity cost is 11%, would it be economically...
P14-14 (similar to) Question Help Float Simon Corporation has daily cash receipts of $57,000. A recent...
P14-14 (similar to) Question Help Float Simon Corporation has daily cash receipts of $57,000. A recent analysis of its collections indicated that customers' payments were in the mail an average of 3 days. Once received, the payments are processed in 3 days. After payments are deposited, it takes an average of 3 days for these receipts to clear the banking system. a. How much collection float (in days) does the firm currently have? b. If the firm's opportunity cost is...
CASH MANAGEMENT AT WEBB CORPORATION Webb Corporation was founded 20 years ago by its president, Bryan...
CASH MANAGEMENT AT WEBB CORPORATION Webb Corporation was founded 20 years ago by its president, Bryan Webb. The company originally began as a mail-order company, but it has grown rapidly in recent years, in large part due to its website. Because of the wide geographical dispersion of the company’s customers, it currently employs a lockbox system with collection centers in San Francisco, St. Louis, Atlanta, and Boston. Holly Lennon, the company’s treasurer, has been examining the current cash collection policies....
P15-14 (book/static) E Question Help Float Simon Corporation has daily cash receipts of $65,000. A recent analysis of its collections indicated that customers' payments were in the mail an average of 2 days. Once received, the payments are processed in 2 days. After payments are deposited, it takes an average of 2.5 days for these receipts to clear the banking system a. How much collection float (in days) does the firm currently have? b. If the firm's opportunity cost is...
Float Simon Corporation has daily cash receipts of $65,000. A recent analysis of its collections indicated that customers' payments were in the mail an average of 2.5 days. Once received, the payments are processed in 2.5 days. After payments are deposited, it takes an average of 2 days for these receipts to clear the banking system. a. How much collection float (in days) does the firm currently have? b. If the firm's opportunity cost is 11%, would it be economically...
P14-14 (similar to) Question Help Float Simon Corporation has daily cash receipts of $57,000. A recent analysis of its collections indicated that customers' payments were in the mail an average of 3 days. Once received, the payments are processed in 3 days. After payments are deposited, it takes an average of 3 days for these receipts to clear the banking system. a. How much collection float (in days) does the firm currently have? b. If the firm's opportunity cost is...
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