Question: please answer this question ! 5. Your rm sells to retail customers nationwide. Your bank has just completed a lockbox study of your cash collection

please answer this question !

please answer this question ! 5. Your rm sells to retail customers

5. Your rm sells to retail customers nationwide. Your bank has just completed a lockbox study of your cash collection system. After a through study of your remittance information, they categorized your customers into 3 groups as shown below. Notice that the consultants expressed remittance data on an average daily basis assuming 30 days in a month. Your opportunity cost of funds is 10%. Using the complete enumeration model, determine which bank oers the lowest cost (hint: 1 bank is optimal) and the customer allocation among the chosen sites. Customer Average monthly Days of oat group remlt'tances Number Face value Bank A Bank B Bank C 1 50,000 $98 5 6 1 2 100,000 5 5 l 4 3 3 75,000 125 3 5 4 Variable processing $0.55 $0.40 $0.70 costs Fixed costs $350 $500 $250

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