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Marta_Voda [28]
3 years ago
14

​(Cash management​) As CFO of Portobello Scuba Diving Inc. you are asked to look into the possibility of adopting a lockbox syst

em to expedite cash receipts from clients.
Portobello receives check remittances totaling ​$28 million in a year.
The firm records and processes 15 000 checks in the same period.
The National Bank of Brazil has informed you that it could provide the service of expediting checks and associated documents through the lockbox system for a unit cost of $ 0.20 per check.
After conducting an​ analysis, you project that the cash freed up by the adoption of the system can be invested in a portfolio of​ near-cash assets that will yield an annual​ before-tax return of 6 percent.
The company usually uses a​ 365-day year in its financial calculations.
a. What reduction in check collection time is necessary for Portobello to be neither better nor worse off for having adopted the lockbox​ system?
b. How would your solution to part ​(a​) be affected if Portobello could invest the​ freed-up balances at an expected annual return of only 3 ​percent?
c. What is the logical explanation for the differences in your answers to part ​(a​) and part ​(b​)?
Business
1 answer:
zheka24 [161]3 years ago
8 0

Answer:

Check the answers below

Explanation:

  • The per instrument cost of the bank is $0.25. Assuming uniform cheque value, the 24 million remittances across 10000 cheque will mean per cheque value of 2400. If this amount can be invested at 8% p.a., then daily investment income will be approx = 2400 * 8% /365 = $ 0.526

  • Now for the company to jus about cover the cost of the cheque processing, the time should reduce by (assuming fractional time in days is possible) 0.25/0.526 = 0.48 days

  • Now if the interest that can be earned reduces to 4%, the average daily interest will also reduce to $0.263. At this level, the time required to cover the cost should reduce by 0.95 days

The difference is simply because the opportunity cost in terms of alternate usage of funds has decreased for the company.

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Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda and yet they sell almos
777dan777 [17]

Answer:

These are the answer choices for the question:

Students do not have good nutritional information.

Soda purchases represent a large fraction of students' budgets.

There are few other places to purchase soda on campus.

The price elasticity of demand for soda is equal to 1.

And this is the correct answer choice:

There are few other places to purchase soda on campus.

Explanation:

If vending machines raise the price of soda by two, by the still sell almost the same amount, this means that they have a monopoly over the selling of soda in campus, and that students continue to buy there because they do not have any other feasible alternatives.

This is the problem with monopolies: they can charge very high prices and still make a profit because they will always have demand, but this very act makes consumers worse off, and reduces general social welfare.

5 0
3 years ago
According to Daniel Kahneman and Amon Tversky, a $1 loss pains us ________ times more than a $1 gain helps us.
34kurt

Daniel Kahneman and Amon Tversky believe that when we suffer a $1 loss, compared to a $1 gain, we suffer 2.25 pain.

<h3>What did Daniel Kahneman and Amon Tversky believe?</h3>

Based on some models that the two ran, they came up with a conclusion that we suffer more from losses than we get help from gain.

Their prediction was that a loss of $1 can hurt us about 2.25 more times than a gain of $1 can help us.

Find out more on losses at brainly.com/question/1165724.

7 0
2 years ago
The Benson Bearing Company sells Textron, Inc. a quantity of baseball bats that were stored in an independent warehouse at the t
polet [3.4K]

Answer:

at the time it receives a negotiable warehouse receipt for the bats.

Explanation:

Benson Bearing Company is selling bats to Textron inc. The bats are stored at an independent warehouse not controlled by Benson Company.

Of the contract states that Textron will pick up the bats at the warehouse, the risk of loss passes to Textron when it recieved a negotiable warehouse reciept for the bats.

This is because the warehouse is not controlled by Benson Company and issuing a warehouse reciept is equivalent to delivering the goods to Textron.

7 0
3 years ago
Morbidity statistics more precisely define the health of a population than mortality statistics.
Korvikt [17]
It is true that morbidity statistics more precisely define the health of a population than mortality statistics.
Morbidity statistics deals with illness within a nation - it is a record about various diseases that people suffer from. So obviously this statistics will be more beneficial for determining the health of a population than a number of dead people. 
3 0
3 years ago
Customer: An entity that describes a customer. An instance occurs for unique customers only using name, date of birth, and login
Tasya [4]

Answer:

1. The relationship between customer and Online - One to one

2. The relationship between customer and Satisfaction - One to many

3. The relationship between online and visits - Many to many

4. The relationship between Visits and satisfaction - Prototype

Explanation:

The relation ship with customer is often one to one. The customers are required to fill the satisfaction surveys which enable the business to understand their value in the eyes of its customers and try to improve their level of service to their customers. The customer satisfaction is important for any business as the satisfied customer may bring more customers.

5 0
3 years ago
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