The Fast Reader Company supplies bulletin board services to numerous hotel chains nationwide. The owner of the

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The Fast Reader Company supplies bulletin board services to numerous hotel chains nationwide. The owner of the firm is investigating the benefit of employing a billing firm to do her billing and collections. Because the billing firm specializes in these services, collection float will be reduced by 17 days. Average daily collections are $1300, and the owner can earn 7% annually (expressed as an APR with monthly compounding) on her investments. If the billing firm charges $325 per month, should the owner employ the billing firm?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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