$19-12 Calculating Transactions Required [LO2]Cow Chips, Incorporated, a large fertilizer distributor based in California, is planning touse a lockbox system to speed up collections from its customers located on the EastCoast. A Philadelphia-area bank will provide this service for an annual fee of $6,500 plus10 cents per transaction. The estimated reduction in collection and processing time isone day. Treasury bills are currently yielding 4 percent per year, and there are 365 daysper year.If the average customer payment in this region is $2,900, how many customers eachday, on average, are needed to make the system profitable for Cow Chips? (Do notround intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)Number of customers32.65 per day

Net Present Value (NPV) calculates the difference between the present value of cash inflows and…

Cow Chips, Incorporated, a large fertilizer distributor based in California, is planning use a lockbox system to speed up collections from its customers located on the Ea Coast. A Philadelphia-area bank will provide this service for an annual fee of $6,500 pl 10 cents per transaction. The estimated reduction in collection and processing time one day. Treasury bills are currently yielding 4 percent per year, and there are 365 da per year. If the average customer payment in this region is $2,900, how many customers ear day, on average, are needed to make the system profitable for Cow Chips? (Do n round intermediate calculations and round your answer to 2 decimal places. 32.16.)

Cow Chips, Incorporated, a large fertilizer distributor based in California, is planning use a lockbox system to speed up collections from its customers located on the Ea Coast. A Philadelphia-area bank will provide this service for an annual fee of $6,500 pl 10 cents per transaction. The estimated reduction in collection and processing time one day. Treasury bills are currently yielding 4 percent per year, and there are 365 da per year. If the average customer payment in this region is $2,900, how many customers ear day, on average, are needed to make the system profitable for Cow Chips? (Do n round intermediate calculations and round your answer to 2 decimal places. 32.16.)

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 5PROB

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