3-56 The local garbage company charges $6 a month A for garbage collection. It had been their practice to send out bills to their 100,000 customers at the end of each 2-month period. Thus, at the end of February it would send a bill to each customer for $12 for garbage collection during January and February. Recently the firm changed its billing date: it now sends out the 2-month bills after one month's service has been performed. Bills for January and February, for example, are sent out at the end of January. The local newspaper points out that the firm is receiv- ing half its money before the garbage collection. This unearned money, the newspaper says, could be temporarily invested for one month at 1% per month interest by the garbage company to earn extra income. Compute how much extra income the garbage company could earn each year if it invests the money as described by the newspaper.

3-56 The local garbage company charges $6 a month A for garbage collection. It had been their practice to send out bills to their 100,000 customers at the end of each 2-month period. Thus, at the end of February it would send a bill to each customer for $12 for garbage collection during January and February. Recently the firm changed its billing date: it now sends out the 2-month bills after one month's service has been performed. Bills for January and February, for example, are sent out at the end of January. The local newspaper points out that the firm is receiv- ing half its money before the garbage collection. This unearned money, the newspaper says, could be temporarily invested for one month at 1% per month interest by the garbage company to earn extra income. Compute how much extra income the garbage company could earn each year if it invests the money as described by the newspaper.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hand written solutions are strictly prohibited.

A
3-56 The local garbage company charges $6 a month
for garbage collection. It had been their practice
to send out bills to their 100,000 customers at the
end of each 2-month period. Thus, at the end of
February it would send a bill to each customer
for $12 for garbage collection during January and
February.
Recently the firm changed its billing date: it now
sends out the 2-month bills after one month's service
has been performed. Bills for January and February,
for example, are sent out at the end of January. The
local newspaper points out that the firm is receiv-
ing half its money before the garbage collection.
This unearned money, the newspaper says, could
be temporarily invested for one month at 1% per
month interest by the garbage company to earn extra
income.
Compute how much extra income the garbage
company could earn each year if it invests the money
as described by the newspaper.

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