How much would ABC receive as total annual interest on the freed cash? How much is the annual cost of the service? What is the annual net benefit or (loss) from having this service?

Q: a. Paradise Retailers, Inc. (PRI) determined that $1,500,000 is needed for cash transactions made…

A: Total cash needed (T) = $1,500,000Fixed charges (F) = $12.95Interest rate (I) = 4.5%

Q: The procedure banks use to compute continuously compounded interest is similar to the process we…

A: The extra interest that one earn in compounding can be calculated as follows :

Q: The procedure banks use to compute continuously compounded interest is similar to the process we…

A: Compound interest simply means the interest on interest. It is the extra interest received from the…

Q: You are considering implementing a lockbox system for your firm. The system is expected to reduce…

A: One financial tool used by businesses to expedite payment collecting and processing is the lockbox…

Q: Sherman’s Sherbet currently takes about 6 days to collect and deposit checks from customers. A…

A: Collection average = $15,000 Days of collection = 6 Reduced time = 3 Interest rate = 0.02%

Q: Blooming Dales, Inc., has just set up a formal line of credit of $10 million with First Community…

A: The effective rate of interest is the rate that represents the actual cost of taking a loan or the…

Q: Bird's Eye Treehouses, Incorporated, a Kentucky company, has determined that a majority of its…

A: Net present value (NPV) is a financial metric used to assess the profitability of an investment. It…

Q: Zimmer Inc. typically receives 850 checks everyday and the average size of check is $700. The…

A: Number of checks received every day$850Average size of checks$700Cost per check$0.20Collection time…

Q: A bank is offering a loan of $20,000 with an interest rate of 9%, payable with monthly payments over…

A: Monthly payment refers to the amount of money payable every month by the borrower to the lender of…

Q: A bank that provides overdraft protection charges 12 percent for each $100 (or portion of $100)…

A: Part (a)The overdraft protection charge = 12% for each $100 (or portion of $100) borrowedThus 12% is…

Q: . Suppose you have a bank account into which you make $100 deposits each month. You find a bank…

A: Periodic Payment = $100 Future Value = $2,000 Time Period = 15 Months

Q: You currently have $5,300. First United Bank will pay you an annual interest rate of 8.8, while…

A: As per the given information: Future value - $13,000 Present value - $5,300 Rate of interest - 8.8…

Q: A woman went to the Beneficial Loan Company and borrowed ST0,000. She must pay $323.53 At the end of…

A: Monthly interest rate can be calculated by excel formula PMT and by IRR formula with series of cash…

Q: A person borrows $3,000 on a bank credit card at a nominal rate of 18% per year, which is actually…

A: Annual Percentage Rate It  the total  interest paid  each year which is before consideration for the…

Q: rfirm sells for cash only, but it is thinking of offering credit, allowing customers 90 days to pay.…

A: Time value of money concept states that the worthiness of money in today's term is much more than…

Q: To payoff a loan of $1000 you need to make 40 payment of $36.56 per month. What rate of interest are…

A: Annual percentage rate refers to the interest rate paid by the borrower to the lender on a yearly…

Q: Dome Metals has credit sales of $468,000 yearly with credit terms of net 60 days, which is also the…

A: Firm often make strategies to collect account receivables outstanding balance at an early point of…

Q: firm a recieves an average of 1000 checks a day. the average check amount is 400. the collection…

A: A lockbox system is an arrangement in which a bank-operated mailing address is provided by banks to…

Q: Bank A offers a nominal annual interest rate of 4% compounded daily, while Bank B offers continuous…

A: TVM refers to the concept that considers the effect of money's interest-earning capacity, which…

Q: Your firm has an average receipt size of $65. A bank has approached you concerning a lockbox service…

A: Savings= Average Receipt*Number of Checks Per Day*Time Saved= 65*8700*2= 1131000

Q: The local bank is currently offering a new investment product, where deposits earn interest…

A: The FV of an investment refers to the cumulative value of its cash flows assuming that they grow at…

Q: 4. Suppose you earn and spend $2,400 per month. You receive your paycheck on the first day of the…

A: a. To determine the average demand for money over the month, we need to calculate the average…

Q: Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box…

A: A lockbox system is used when a company has high collection float  and the funds are locked up. The…

Q: Bank A offers a nominal annual interest rate of 5% compounded daily, while Bank B offers continuous…

A: Here, Bank A: Annual Interest rate = 5%  No. of Compounding Periods = 365 days Present value of…

Q: The firm's bank charges $18 per wire and $0.50 per EDT. The EDT takes one day longer to clear. The…

A: Since  The minimum transfer balance= TBAL TBAL=Incremental costDS×(K-ECR(1-RRR))365 Where: DS= Days…

Q: First National Bank requires a minimum balance of $1000 on its interest-earning checking accounts.…

A: Opportunity Cost refers to the potential benefit foregone when choosing one alternative over…

Q: On an average day, Town Center Hardware receives $2,420 in checks from customers. These checks clear…

A: Maximum amount this store should pay to completely eliminate its collection float =receives  checks…

Q: Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8%…

A: We know that the formula to calculate the present value is I/(1+i)n, where I is the cash flow that…

Q: Hamilton wants to accumulate ₺ 24.000 at the end of 4 years. It starts quarterly payments in a bank…

A: Amount at the end of 4 years = 24000 Years = 4 Terms(n) = 4 *4 = 16 quarterly deposits Rate (r) = 6%…

Q: a. Calculate the loan’s annual financing cost. b. Calculate the loan’s annual percentage rate. c.…

A: Annual percentage rate (APR) refers to a real interest rate which an investor is expect from his…

Q: Suppose you have $8,675,309 to deposit into a savings account for one year. The bank lets you choose…

A: Here Investor has $8,675,309 to deposit for 1 year @ 12% in two options: Compounded annually…

Q: General Products writes checks that average $33,000 daily. These checks take an average of 6 days to…

A: Data given: Average payments received daily = $35,000 Float time = 3 days Float time is the time…

Q: Your firm has an average receipt size of $135. A bank has approached you concerning a lockbox…

A: In this scenario, our objective is to assess whether the lockbox project should be approved,…

Q: ugh checks. On average 150 checks are received per day while each check has an average value of…

A: Given: On average 150 checks are received per day while each check has an average value of P2,500.…

Q: A local bank is advertising that it pays depositors 6% compounded monthly, yielding an effective…

A: Simple interest is calculated by multiplying principal into rate of interest for the given period of…

Q: Brady and Sons uses accounts receivable as collateral to borrow money for operations and payroll…

A: Interest is the amount of charge that is being levied on invested amount. It can be simple interest…

Q: What lump sum of money must be deposited into a bank account at the present time so that ​$600 per…

A: Monthly withdrawal (C) = $600 Monthly interest rate (r) = 0.0025 (i.e. 1 / 400) Number of monthly…

Q: Bird's Eye Treehouses, Incorporated, a Kentucky ompany, majority of its customers are located in the…

A: Average number of payments per day$880.00Average value of the payment$830.00Variable lockbox fee…

Q: You want to invest $25,000 and are looking for safe investment options. Your bank is offering you a…

A: The objective of the question is to calculate the effective rate of return for a certificate of…

Q: A bank features a savings account that has an annual percentage rate of r=3.4% with interest…

A: The compound value of money can be depicted as the amount of interest generated on interest earned…

Q: Your firm has an average receipt size of $60. A bank has approached you concerning a lockbox service…

A: Given, Average receipt size = $60 Total collection time decreases = 2 days Checks received per day =…

Q: You currently have $5,000. First United Bank will pay you an annual interest rate of 8.1, while…

A: The concept of time value of money will be used here. Future value or amount is obtained by…

Q: Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lockbox…

A: Lockbox system is a service provided by banks to different companies with regards to receipt of…

Q: Dome Metals has credit sales of $450,000 yearly with credit terms of net 45 days, which is also the…

A: Credit management is considered to be important part. Discount are offered in order to receive…