Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Question
Chapter 15, Problem 15.15P
a.
Summary Introduction
To determine: The amount of cash will be made available for other uses under the lockbox system.
b.
Summary Introduction
To determine: The net benefit (cost) will the firm realize if it adopts the lockbox system and should it adopt the proposed lockbox system
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Students have asked these similar questions
Lockbox system Eagle Industries feels that a lockbox system can shorten its accounts receivable collection period by 2 days Credit sales are $3,400,000 per year, billed on a continuous basis. The firm has
other equally risky investments with a return of 12%. The cost of the lockbox system is $11,000 per year (Note Assume a 365-day year)
a. What amount of cash will be made available for other uses under the lockbox system?
b. What net benefit (cost) will the firm realize if it adopts the lockbox system? Should it adopt the proposed lockbox system?
a. The amount of cash that will be made available for other uses under the lockbox system is $ (Round to the nearest dollar)
Problem
The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment.
1. Using the Baumol model, what level of cash infusion minimizes Sandbox’s costs associated with cash? Use a number, no decimal value no currency, no space, no commas. *
2. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the total costs per month associated its cash infusions? Use a number, no decimal value no currency, no space, no commas *
please answer all questions. Thanks!
Problem
The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment.
1. If Sandbox gets a cash infusion of P1 million each time it needs cash, how many transactions would be associated with its cash investment? Use a number, no decimal value no currency, no space, no commas *
2. Using the Baumol model, how much would be the Sandbox’s minimum total costs associated with cash infusion? Use a number, no decimal value no currency, no space, no commas. *
THIS IS NOT A BARTLEBY ESSAY QUESTIONS. IT INVOLVES COMPUTATIONS, NOT ESSAYS! READ IT AGAIN! DO NOT ASK THIS TO BE REVISED!!!!
please answer all questions. Thanks!
Chapter 15 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 15.1 - Why is working capital management one of the most...Ch. 15.1 - Prob. 15.2RQCh. 15.1 - Prob. 15.3RQCh. 15.2 - Prob. 15.4RQCh. 15.2 - Prob. 15.5RQCh. 15.2 - What are the benefits, costs, and risks of an...Ch. 15.2 - Prob. 15.7RQCh. 15.3 - Prob. 15.8RQCh. 15.3 - Briefly describe the following techniques for...Ch. 15.3 - Prob. 15.10RQ
Ch. 15.4 - Prob. 15.11RQCh. 15.4 - Prob. 15.12RQCh. 15.4 - What are the basic tradeoffs in a tightening of...Ch. 15.4 - Prob. 15.14RQCh. 15.4 - Prob. 15.15RQCh. 15.4 - Prob. 15.16RQCh. 15.5 - Prob. 15.17RQCh. 15.5 - What are the firms objectives with regard to...Ch. 15.5 - Prob. 15.19RQCh. 15.5 - Prob. 15.20RQCh. 15.5 - Prob. 15.21RQCh. 15 - EOQ analysis Thompson Paint Company uses 60,000...Ch. 15 - Learning Goal 4 ST15- 3 Relaxing credit standards...Ch. 15 - Learning Goal 2 E15-1 Everdeen Inc. has a 90-day...Ch. 15 - Learning Goal 2 E15-2 Icy Treats Inc. is a...Ch. 15 - Prob. 15.3WUECh. 15 - Forrester Fashions has annual credit sales of...Ch. 15 - Prob. 15.1PCh. 15 - Learning Goal 2 P15-2 Changing cash conversion...Ch. 15 - Learning Goal 3 P15-5 EOQ analysis Tiger...Ch. 15 - EOQ, reorder point, and safety stock Alexis...Ch. 15 - Prob. 15.7PCh. 15 - Prob. 15.8PCh. 15 - Prob. 15.9PCh. 15 - Relaxation of credit standards Lewis Enterprises...Ch. 15 - Initiating an early payment discount Gardner...Ch. 15 - Shortening the credit period A firm is...Ch. 15 - Lengthening the credit period Parker Tool is...Ch. 15 - Prob. 15.14PCh. 15 - Prob. 15.15PCh. 15 - Prob. 15.16PCh. 15 - Prob. 15.18P
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Similar questions
- PROBLEM The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. 1. If Sandbox gets a cash infusion of P1 million each time it needs cash, how much would be the average cash balance associated with its cash investment? Use a number, no decimal value no currency, no space, no commas * 2. Using the Baumol model, how much would be the Sandbox’s minimum total costs associated with cash infusion? Use a number, no decimal value no currency, no space, no commas. 3. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the holding costs associated with its cash investment? Use a number, no decimal value no currency, no space, no commas * PLEASE ANSWER ALL QUESTIONS. THANKSarrow_forwardI need the answer to 5.23 and 5.28.arrow_forwardEconomicsarrow_forward
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