Problemit takes cookie cutter modular homes inc about six, Ask an Expert

Finance

Problem:

It takes Cookie Cutter Modular Homes, Inc., about six days to receive and deposit checks from customers. Cookie Cutter Modular Homes management is considering a lockbox system to reduce the firm's collection times. It is expected that the lockbox system will reduce receipt and deposit times to three days total. Average daily collections are $122,000, and the required rate of return is 5 percent per year. Assume 365 days per year.

Required:

Question 1: What is the daily dollar return that could be earned on these savings?

Note: Explain all steps comprehensively.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148328

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