Solve the following problem: Norma’s Cat Food of Shell Knob
ships cat food throughout the country. Norma has determined that through
the establishment of local collection centers around the country, she
can speed up the collection of payments by two and one-half days.
Furthermore, the cash management department of her bank has indicated to
her that she can defer her payments on her accounts by one-half day
without affecting suppliers. The bank has a remote disbursement center
If the company has $5 million per day in collections
and $3 million per day in disbursements, how many dollars will the cash
management system free up? Justify your answers.
If the company can earn 8 percent per annul on freed-up funds, how much will the income be? Justify your answers.
If the annual cost of the new system is $800,000, should it be implemented? Explain why or why not.
Yes because the cost is lower than the income.
Assignment 2 Grading Criteria
Correctly calculated that amount in dollars the cash management system will free up and justified the response.
Correctly calculated income and justified response.
Clearly explained if the new system should be implemented.
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation.
The answers are given I just need you to explain them thoroughly for me. Please and thank you!