Question: By obtaining a lockbox, Nizam's Manufacturing was able to reduce its total cash collection time by two days. The firm has annual sales of $570,000

By obtaining a lockbox, Nizam's Manufacturing was able to reduce its total cash collection time by two days. The firm has annual sales of $570,000 and can earn 4.75 percent annual interest. Assuming that the lockbox costs $50 per year, calculate the savings that can be attributed to the lockbox?

Step by Step Solution

★★★★★

3.41 Rating (151 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The savings that can bed attributed to Nizams lockbox are A... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1062-B-C-F-S (696).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Golden Eagle Company has the following balances at the end of November: The following information is known for the month of December: 1. Purchases of supplies for cash during December were $2.500....

Multiple Choice- On December 1, 2008, Tuscano Corp. entered into a transaction to import raw materials from a foreign company. The account is to be settled on February 1 with the payment of 60,000...

Mark Hancock, Inc. manufactures a specialized surgical instrument called the HAN-20. The firm has grown rapidly in recent years because of the products low price and high quality. However, sales have...

By obtaining a lockbox, Blossoms Manufacturing was able to reduce its total cash collection time by two days. The firm has annual sales of $547,500 and can earn 4.00 percent annual interest. Assuming...

By obtaining a lockbox, Sheridans Manufacturing was able to reduce its total cash collection time by two days. The firm has annual sales of $609,550 and can earn 5.00 percent annual interest....

By obtaining a lockbox, Sunlands Manufacturing was able to reduce its total cash collection time by two days. The firm has annual sales of $573,050 and can earn 5.00 percent annual interest. Assuming...

1. Which of the following terms is defined as the length of time between the purchase of inventory and the date of receipt of cash from the sale of that inventory is called the: A. Inventory period....

Please see the attached- SHOW ALL Work for the attached. Thank you. BUS333 - Week 6 Chapter 18 (Short-Term Financial Planning); Chapter 19 (Cash and Liquidity Management) 1. Which of the following...

6 homework questions using excel Future value: Chuck Tomkovick is planning to invest $25,000 today in a mutual fund that will provide a return of 8 percent each year. What will be the value of the...

Perez Company incurred manufacturing overhead cost for the year as follows. Direct materials $ 38.80 /unit Direct labor $ 28.00 /unit Manufacturing overhead Variable $ 11.10 /unit Fixed ($19.50/unit...

What are uncorrected misstatements, and what role do they play in forming the audit opinion on the financial statements?

26. Not only is the sky blue [as a result of scattering], but light coming from it is also partially polarized. You can readily observe this by placing a piece of Polaroid (for example, one lens of a...

Bank Reconciliation and Entries The cash account for Highlander Diamond Co. on April 1, 20Y5, indicated a balance of $35,400. During April, the total cash deposited was $120,255, and checks written...

On December 31, Year 5, Par Company purchased 70% of the outstanding common shares of Sub Company for $9,100,000 in cash. On that date, the shareholders' equity of Sub consisted of $2 million in...

In the extra credit assignment for partnership formations, the basic fact pattern is as follows: Mary and Todd form the MT Partnership, with a transfer of the following properties: Mary $500,000 cash...

Ayurveda is a form of medicine practiced in India. In one study, 20% of U.S.- and Indian-manufactured Ayurvedic medicines purchased through the Internet in 2005 contained detectable levels of several...

At the end of Year One, a company has an enacted tax rate of 30 percent. During Year One, the company reported a $110,000 gain for financial reporting purposes that would not be taxed until Year Two....

Discount factors For each of the following, identify whether the persons d is likely to be high (as in close to one) or low (as in close to zero): (a) A person who raids his trust fund to purchase a...

Chuck Tomkovick is planning to invest $25,000 today in a mutual fund that will provide a return of 8 percent each year. What will be the value of the investment in 10 years?

Ted Rogers is investing $7,500 in a bank CD that pays a 6 percent annual interest. How much will the CD be worth at the end of five years?

Your aunt is planning to invest in a bank CD that will pay 7.5 percent interest semiannually. If she has $5,000 to invest, how much will she have at the end of four years?

Which of the following statements is correct? The overall size of the derivatives worldwide is bigger than the size of all listed stocks Derivatives can only be used to hedge risks Of all traded...

How much should you deposit at the end of each month into an investment account that pays 6% compounded monthly to have $4 million when you retire in 44 years? How much of the $4 million comes from...

Please help? 4 The probability that a student has a Visa card (event V) is .82. The probability that a student has a MasterCard (event M) is .23. The probability that a student has both cards is .03....