33.subject:- Accounting Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined thatthrough the establishment of local collection centers around the country, she can speed up the collection of payments by two days.Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts byone-half day without affecting suppliers. The bank has a remote disbursement center in Florida.a. If Neon Light Company has $2.20 million per day in collections and $1.04 million per day in disbursements, how many dollars willthe cash management system free up?Note: Enter your answer in dollars not in millions (e.g., $1,234,567).Freed-up fundsb. If Neon Light Company can earn 7 percent per annum on freed-up funds, how much will the income be?Note: Enter your answer in dollars not in millions (e.g., $1,234,567).Interest on freed-up cashc. if the total cost of the new system is $395,000, should it be implemented?YesO No

Freed-up cash refers to monies that become available to an individual or organization after…

Answered: Neon Light Company of Kansas City ships…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 12P

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Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by one and one-half days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Florida. a. If Neon Light Company has $2.30 million per day in collections and $1.06 million per day in disbursements, how many dollars will the cash management system free up? (Enter your answer in dollars not in millions (e.g., $1,234,567).) Freed-up funds b. If Neon Light Company can earn 9 percent per annum on freed-up funds, how much will the income be? (Enter your answer in dollars not in millions (e.g., $1,234,567).) Interest on freed-up cash c. If the total cost of the new system is $405,000, should it be…
Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by two and one-half days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Florida.
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…
Aurora Electrical Company 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 $2.45 million per day in collections and $1.09 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 $ b. If Aurora Electrical Company can earn 7% 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 c. If the total cost of the system is $420,000 should it be implemented? ○…
Osborne Shipbuilding Company, located in Baton Rouge, receives large remittances from its customers in New York and California. If the firm deposits these checks in its local bank, two business days are required for the checks toclear and the funds to become usable by the firm. However, if Osborne sends an employee to New York or Californiaand presents the check for payment at the bank upon which it is drawn, the funds are available immediately to thefirm. The firm can earn 8% per annum on short-term investments, and the cost of sending an employee to New Yorkor California to present the check for payment is $500. What is the net benefit to the firm of employing this specialhandling technique for a $5 million check received on Tuesday? (Assume 365 days per year.)
Osborne Shipbuilding Company, located in Baton Rouge, receives large remittances from its customers in New York and California. If the firm deposits these checks in its local bank, two business days are required for the checks to clear and the funds to become usable by the firm. However, if Osborne sends an employee to New York or California and presents the check for payment at the bank upon which it is drawn, the funds are available immediately to the firm. The firm can earn 8% per annum on short-term investments, and the cost of sending an employee to New York or California to present the check for payment is $500. What is the net benefit to the firm of employing this special handling technique for a $5 million check received on Tuesday? (Assume 365 days per year.)
Currently James Corporation is using a decentralized collection system whereby customers mail their checks to one of the firm’s eight regional locations. Its annual sales are $150 million. Checks are deposited each business day in a local bank and the amount of the deposit is sent to the firm’s concentration bank in Dallas. The average time between deposit in the local bank and the availability of those funds, in Dallas, to Riley is 6 days. James has determined that the use of wire transfers would reduce the float by four days, but the transfer will cost $15.00. If transfers will be made on each of the 250 days that banks are open, should Riley switch to the wire transfer system? Assume that James can earn 6% on the funds released through this more efficient transfer.
7. A retailer firm operates in several cities within the country. The individual store managers deposit daily collections at a local bank in a non-interest bearing checking account. Twice per week, the local bank issues a depository transfer check (DTC) to the central bank at headquarters. The firm's controller is considering the use of a wire transfer. The additional cost of each transfer would be P25 but collections will be accelerated by 2 days. The annual interest paid by the central bank is 7.2% (.02% a day). Assuming 350 days in a year, at what amount of pesos transferred would it be economically feasible to use a wire transfer instead of the DTC? A. it would never be economically feasible B. any amount greater than P173 C. P125,000 and above D. above P62,500
Please answer all subparts.please make an attempt.Thanks in advance
Camila Martinez has several credit cards, on which she is carrying a total current balance of $6,500. She is considering transferring this balance to a new card issued by a local bank. The bank advertises that, for a 4 percent fee, she can transfer her balance to a card that charges a 0 percent interest rate on transferred balances for the first 6 months. Calculate the fee that Camila would pay to transfer the balance. $ Describe the benefits and drawbacks of balance transfer cards.
João, owner of a small clothing store, found that his company's cash needed funds in the form of money so that his employees' salary commitments could be settled. So the alternative he had at the moment was the discount of duplicates at a bank branch. The amount required for the payment of employees is $35,000.00, the amount held in duplicates is $42,000.00 with a maturity of 60 days. The bank is charging a discount rate of 60% per year. Will John be able to pay the employees? What is the annual interest rate charged by the bank?
Case Study: Hassam runs a fruit stall at the local market and at the end of each day he banks the cash in the cash register. the cash register records each sale and can provide a total for each day but Hassam believes that often the staffs are too busy and do not always enter the sales in the cash register but simply put the cash in the till. the total from the cash register is produced each month for the budiness's accountant to prepare financial statements. Recently, Hassam employed a university student to work on weekends and he is concerned that after this the daily amount banked seems to have decreased even though Hassam feels that sales have not really changed. the student often talks about how he spends his evenings at the casino in the hope of winning enough to pay for his university studies so that he doesn't have to work every weekend. reqiured: please answer this question by listing to Hassam 5 controls he could put in place to minimize the risk of one of his employees…

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