The white oak company's annual sales are 219 million van average of 9 days elapses between when a customer malls its payment and when the funds become usable by the firm.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The white oak company's annual sales are 219 million van average of 9 days elapses between when a customer malls its payment and when the funds become usable by the firm.

 

a. If the company could speed up the collection of funds by 2 days, what would be the increase in the firm’s average cash balance?

b. Assuming that these additional funds can be invested in the marketable securities that yield 7 percent per year, determine the increase in white Oak’s annual (pretax) earnings

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