Aurora Electrical Cormpany of Yellowknife ships wind turbines throughout the country. Mr. Beam, the financial manager, han that through the establishment of local collection centres around the country, he can speed up the collection of payments Furthermore, the cash management department of the company's bank has indicated to him that he can defer payments c accounts by one day without offending suppliers. The bank has a remote disbursement centre in New Brunswick a. If Aurora Electrical Company has $1.5 million per day in collections and $0.8 million per day in disbursements, how mare the cash management system free up? (Enter the answer in dollers not in millions.) Freed-up funds $ (6760008 b. If Aurora Electrical Company can earn 4 percent per annum on freed-up funds, how much income can be generated? (E answer in dollers not in millions.) Interest on freed-up cash $ 473000 c. If the total cost of the system is $125,000, should it be mplemented? Yes O No

Aurora Electrical Cormpany of Yellowknife ships wind turbines throughout the country. Mr. Beam, the financial manager, han that through the establishment of local collection centres around the country, he can speed up the collection of payments Furthermore, the cash management department of the company's bank has indicated to him that he can defer payments c accounts by one day without offending suppliers. The bank has a remote disbursement centre in New Brunswick a. If Aurora Electrical Company has $1.5 million per day in collections and $0.8 million per day in disbursements, how mare the cash management system free up? (Enter the answer in dollers not in millions.) Freed-up funds $ (6760008 b. If Aurora Electrical Company can earn 4 percent per annum on freed-up funds, how much income can be generated? (E answer in dollers not in millions.) Interest on freed-up cash $ 473000 c. If the total cost of the system is $125,000, should it be mplemented? Yes O No

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Aurora Electrical Cormpany of Yellowknife ships wind turbines throughout the country. Mr. Beam, the financial manager, has determined
that through the establishment of local collection centres around the country, he can speed up the collection of payments by two days
Furthermore, the cash management department of the company's bank has indicated to him that he can defer payments on his
accounts by one day without offending suppliers. The bank has a remote disbursement centre in New Brunswick.
a. If Aurora Electrical Company has $1.5 million per day in collections and $0.8 million per day in disbursements, how many dollars will
the cash management system free up? (Enter the answer in dollars not in millions.)
Freed-up funds
S (6760000
b. If Aurora Electrical Company can earn 4 percent per annum on freed-up funds, how much income can be generated? (Enter the
answer in dollars not in millions.)
Interest on freed-up cash
473000
c. If the total cost of the system is $125,000, should it be implemented?
Yes
O No

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