A company has a daily float of 5000 and the float time is 4, Ask an Expert

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A company has a daily float of $5,000 and the float time is 4 days. A bank is offering to reduce float time to 1 day. The bank is charging a fee $1,164 per year. The company’s hurdle return per year is 8.0%.

How much is the one time benefits of reducing float time from 4 days to 1 day?

How much is the present value of the perpetual fee to the bank?

How much is the NPV?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92801370

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