Accusoft Systems is offering small business owners a software package that keeps track of many accounting functions from bank transactions to sales invoices. The site license will cost $42,000 to install and will require a fee of $2000 every 3 months. If your company can save $13,500 every quarter and have the security of managing its books in-house, how long will it take for you to recover the investment at an interest rate of 10% per quarter? The time taken to recover the investment is determined to be ] quarters.

Accusoft Systems is offering small business owners a software package that keeps track of many accounting functions from bank transactions to sales invoices. The site license will cost $42,000 to install and will require a fee of $2000 every 3 months. If your company can save $13,500 every quarter and have the security of managing its books in-house, how long will it take for you to recover the investment at an interest rate of 10% per quarter? The time taken to recover the investment is determined to be ] quarters.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Cow Chips, Incorporated, a large fertilizer distributor based in California, is planning to use a lockbox system to speed up collections from its customers located on the East Coast A Philadelphia-area bank will provide this service for an annual fee of $12,000 pald at the end of the year plus 5 cents per transaction. The estimated reduction in collection and processing time is one day. Treasury bills are currently yielding 5 percent per year, and there are 365 days per year. If the average customer payment in this region is $5,900, how many customers each day, on average, are needed to make the system profitable for Cow Chips? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Number of customers per day
Use this information for questions 9 to 12: You are put in charge of starting a credit card business for a bank. This is what you've learned so far: Your boss wants you to get to $10 million in outstanding loans within a year. It costs you $75,000 a year to employ a risk officer to approve or deny loan applications. You need two loan collectors, paid $50,000 each. Your salary is $125,000 a year. The bank is paying depositors 1%, in line with the inflation rate. You can change the credit card interest rate any time you want. You expect 6% of your customers to default each year. 9. You need to charge your credit card customers % to cover the costs of running the business. 10. Yes No. You need to charge your customers to cover the risk of a rise in future inflation. 11. You expect your dollar losses for customer defaults to be $ a year. 12. The minimum amount you need to charge the credit card customers per year to break even is: (A) (B) 8% 10% (C) (D) 12% 15%
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