Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Hardin-Gehr Corporation (HGC) began operations 5 years ago as a small firm serving customers in the Detroit area. However, its reputation and market area grew quickly. Today HGC has customers all over the United States. Despite its broad customer base, HGC has maintained its headquarters in Detroit; and it keeps is central billing system there. On average, it takes 5 days from the time customers mail in payments until HGC can receive, process, and deposit them. HGC would like to set up a lockbox collection system, which it estimates would reduce the time lag from customer mailing to deposit by 3 days - bringing it down to 2 days. HGC receives an average of $1,400,000 in payments per day.

a. How much free cash would HGC generate if it implemented the lockbox system? Would this be a one-time cash flow or a recurring one, assuming the company ceases to grow? How would growth affect your answer?

b. If HGC has an opportunity cost of 10%, how much is the lockbox system worth on an annual basis?

c. What is the maximum monthly charge HGC should pay for the lockbox system?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M946663

Have any Question? 


Related Questions in Basic Finance

Introduction to corporate finance case work sources of

Introduction to Corporate Finance Case Work: Sources of Finance The task is to analyze available sources of finance for a selected SME entity. (1 SME company) What sources of finance are available for the selected entity ...

We are going through financial crisis seven years have

We are going through financial crisis. Seven years have passed and we are still in recovery stage. Based on the analysis in the class, can you suggest and elaborate an alternative way to deal with the financial crisis?

In 2009 daryl bought a life insurance policy on his life

In 2009, Daryl bought a life insurance policy on his life with a death benefit of $200,000. He named his wife Melanie the beneficiary of this policy. In 2012, Daryl created an ILIT with Melanie as beneficiary, and transf ...

Describe the mil-std-1312 nas test name three generic

Describe the MIL-STD-1312 (NAS) test ? Name three generic ways to prevent or at least minimize self-loosening ? Define prevailing torque ? A proper length-to-diameter ratio for the bolt can reduce or eliminate self-loose ...

Discussionmiddot determine a key difference between

Discussion · Determine a key difference between a fee-for-service plan and an episode of care payment plan, and indicate the plan that you believe to be most advantageous for the majority of patients. Provide support for ...

Write down two economic effects of corporate bankruptcy and

Write down two economic effects of corporate bankruptcy and explain it( give the example)

1 how is a hazard different from a disaster2 what is the

1. How is a hazard different from a disaster? 2. What is the most frequent and widespread disaster-causing hazard? 3. What scale is commonly used to describe the effects of earthquakes? 4. How are earthquakes measured?

1 compare and contrast the role of erp systems and planning

1. Compare and contrast the role of ERP systems and planning systems in enhancing firm performance and competitiveness. 2. Compare and contrast the role of ERP systems and logistics execution systems. 3. Compare and cont ...

Pets store inc sells on terms of 320 net 75 what is the

Pets Store Inc. sells on terms of 3/20, net 75. What is the effective annual cost of trade credit under these terms? Use a 365-day year.

1 how does descriptive research differ from other kinds of

1. How does descriptive research differ from other kinds of research strategies, such as correlational, experimental, and quasi-experimental research? 2. What is a cross-sectional survey design, and how does it differ fr ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen