Tambourines Inc. collects $12 million per year from customers in a remote location. The average remittance check
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Tambourines Inc. collects $12 million per year from customers in a remote location. The average remittance check is $1,200. A lock box system would shorten the overall float on these receipts from eight days to seven days, but would cost $2,500 per year plus $.20 per check. The relevant interest rate is 9%. Should Tambourines install the system? Use a 360-day year.
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Interest savings on the available funds are Current amount in float 12M 8360 266667 Prop...View the full answer
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