City Farm Insurance has collection centers across the country to speed up collections. The company also makes
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Question:
City Farm Insurance has collection centers across the country to
speed up collections. The company also makes its disbursements from
remote disbursement centers so the firm's checks will take longer
to clear the bank. Collection time has been reduced by three days
and disbursement time increased by one and onehalf days because of
these policies. Excess funds are being invested in shortterm
instruments yielding percent per
annum.
a If City Farm has $ million per day in
collections and $ million per day in disbursements, how many
dollars has the cash management system freed upEnter
your answer in dollars not in millions eg
$Freedup funds b How much can City Farm earn in dollars per
year on shortterm investments made possible by the freedup cash?
Enter your answer in dollars not in millions eg
$Interest on freedup cash
Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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