The White Oak Companys annual sales are $219 million. An average of 9 days elapses between when
Fantastic news! We've Found the answer you've been seeking!
Question:
The White Oak Company’s annual sales are $219 million. An average of 9 days elapses between when a customer mails its payment and when the funds become usable by the firm.
a. If the company could speed up the collection of funds by 2 days, what would be the increase in the firm’s average cash balance?
b. Assuming that these additional funds can be invested in marketable securities that yield 7 percent per year, determine the increase in White Oak’s annual (pre-tax) earnings.
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
Posted Date: