City Farm Insurance has collection centers across the country to speed up collections. The company also makes its disbursements from remote disbursement centers, so the firm's checks will take longer to clear the bank. Collection time has been reduced by three days and disbursement time increased by two days because of these policies. Excess funds are being invested in short-term instruments yielding 4 percent per annum. a. If City Farm has $4.60 million per day in collections and $3.60 million per day in disbursements, how many dollars has the cash management system freed up? (Enter your answer in dollars not in millions (e.g., $1,234,567).) Freed up funds?___________ b. How much can City Farm earn in dollars per year on short-term investments made possible by the freed-up cash? Interest on freed-up cash

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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Bird's Eye Treehouses Inc. has determined that a majority of its customers are located in the Winnipeg area. It therefore is considering using a lockbox system offered by a bank in Manitoba. The bank has estimated that use of the system will reduc collection time by 1.5 days. Average number of payments per day 760 Average value of payment $ 770 Variable lockbox fee (per transaction) $ 0.10 Annual interest rate on money market securities 4.0% e-1. What is the NPV of the new lockbox system? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit "$" sign in your response.) NPV $170558.7 a-2. Should the lockbox project be accepted? 13 Yes No b-1. If there were a fixed charge of $7,000 per year in addition to the variable charge, what is the NPV of the new lockbox system? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit "$" sign in your response.) NPV $ b-2.…

5. Your marketing staff encourages you to increase your NOW account rate from 0.10% to 0.25% in order to obtain an increase from $1 billion to $1.15 billion in deposits. The branch managers express concern that the service costs on the new deposits will be $140 per account with an average balance of $1200 per account and service charge revenue will be only $2 per month per account. They argue that CDs at 6% are a cheaper source of funds. If the reserve requirement on interest checking is 11% and on CDs is 2%, which source of deposits is cheaper? (Fed's Interest on reserves is 0.50%)

Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 400 payments a day will be made to lock boxes with an average payment size of $3,000. The bank's charge for operating the lock boxes is $0.50 a check. The interest rate is 0.012% per day. a. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. Note: Do not round intermediate calculations. b. Is it worthwhile to adopt the system? c. What minimum reduction in the time to collect and process each check is needed to justify use of the lock-box system? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Net daily advantage b. Is it worthwhile to adopt the system? c. Minimum reduction in time $ Yes (56) 1.39 days

Jim Hayes wants to buy some electronic equipment for $800. Jim has decided to save uniformamount at the end of each month so that after 12 months he will have the required $800. If theinterest rate is 0.5% per month (a) Construct a cash flow diagram (b) determine how much Jim has to deposit each month by using tabulated factors

The Cowboy Bottling Company will generate ​$16 million in credit sales next year. Collection of these credit sales will occur evenly over this period. The​ firm's employees work 300 days a year.​ Currently, the​ firm's processing system ties up 6 ​days' worth of remittance checks. A recent report from a financial consultant indicated procedures that will enable Cowboy Bottling to reduce processing float by 2 full days. If Cowboy invests the released funds to earn 6 ​percent, what will be the annual​ savings?

A new bank has vault cash of $2 million and $6 million in deposits held at its Federal Reserve District Bank.If the required reserves ratio is 9 percent, what dollar amount of deposits can the bank have?

es Agarwal, Incorporated, has a 50-day average collection period and wants to maintain a minimum cash balance of $40 million, which is what the company currently has on hand. The company currently has a receivables balance of $198 million and has developed the following sales and cash disbursement budgets (in millions): Sales Total cash disbursement Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Net cash inflow Q1 $ 459 302 Ending cash balance Minimum cash balance Cumulative surplus (deficit) Q2 $531 466 Complete the following cash budget for the company. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to the nearest whole million dollar amount, e.g., 32. Q1 Q3 $ 612 720 AGARWAL, INCORPORATED Cash Budget (in millions) 459 Q4 $576 477 302 Q2 531 466 Q3 612 720 Q4 576 477