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Q1) Essex Company determined that average of 10 days elapses between when customer payments are received and deposited funds clear customer's bank and become usable by firm. Essex's annual sales are $240 million (Suppose 365 days per year when converting from annual data to daily data or vice versa.) Assume that Essex is able to decrease the time needed to process customer payments by 4 days through more efficient payment processing methods. Given that these extra funds can be used to decrease firm's outstanding bank loans (10% interest rate), determine annual pretax savings in interest expense?

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