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63.
On an average day, your firm receives $11,800 in checks from customers.
These checks clear the bank in an average of 2.8 days. The applicable daily
interest rate is 0.015 percent. What is the highest daily fee your firm should
pay to completely eliminate the collection float? Assume each month has 30
days.
64.
On an average day, Wilson & Wilson receives $7,800 in checks from
customers. These checks clear the bank in an average of 1.7 days. The
applicable daily interest rate is 0.022 percent. What is the highest daily fee
this firm should pay to completely eliminate its collection float? Assume
each month has 30 days.
65.
Your average customer is located 4.3 mailing days away from your firm. You
have determined that, on average, it is taking your staff 1.5 days to process
payments received from customers. In addition, it takes an average of 2.8
days for your funds to be available for use once you have made your bank
deposit. What is your firm's collection time?
66.
It takes your firm 4.5 days to prepare and mail out all the monthly
statements to your customers. On average, the mail time between your firm
and your customers is 2.6 days. Customer checks take an average of 1.8
days to clear the bank. You have determined that your total average
collection time is 6.1 days. How long, on average, does it take your firm to
process the payments from customers?
67.
Currently, your firm requires 2 days to process the checks which customers
mail in to pay for their credit purchases. The average mail time associated
with these payments is 3.4 days and the check clearing time is 2.1 days. If
your firm adopts a lockbox system, the mail time will be cut in half. In
addition, if employees are reassigned, checks could be processed the same
day they are received. How long will your collection time be if both the
lockbox system and the job reassignments are implemented?
68.
You are considering implementing a lockbox system for your firm. The
system is expected to reduce the average collection time by 1.2 days. On an
average day, your firm receives 320 checks with an average value of $99
each. The daily interest rate on Treasury bills is 0.014 percent. What is the
anticipated amount of the daily savings if this system is implemented?
69.
Roger's Distributors receives an average of 310 checks a day. The average
amount per check is $629. The firm is considering a lockbox system which it
anticipates will reduce the average collection time by 1.5 days. The daily
interest rate on Treasury bills is 0.011 percent. What is the amount of the
expected daily savings of the lockbox system?
70.
Hand Tools, Inc. receives an average of 611 checks a day. The average
amount per check is $425. The firm is considering a lockbox system which it
anticipates will reduce the average collection time by 1 day. The bank
charges $0.275 a check for this service. The daily interest rate on Treasury
bills is 0.013 percent. What is the average daily cost of the lockbox system?
71.
You are considering implementing a lockbox system for your firm. The
system is expected to reduce the average collection time by 1.3 days. On an
average day, your firm receives 136 checks with an average value of $219
each. The daily interest rate on Treasury bills is 0.021 percent. The bank
charge per check is $0.26. What is the anticipated daily cost of the lockbox
system?
72.
You are considering implementing a lockbox system for your firm. The
system is expected to reduce the average collection time by 2.8 days. On an
average day, your firm receives 2,419 checks with an average value of
$1,287 each. The daily interest rate on Treasury bills is 0.016 percent. The
bank charge per check is $0.30. What is the net present value of this
lockbox arrangement?
73.
Rosewell International receives an average of 268 checks a day with an
average amount per check of $780. The firm is considering a lockbox
system which it anticipates will reduce the average collection time by 1.4
days. The bank charges $0.21 a check for this service. The daily interest
rate on Treasury bills is 0.02 percent. What is the net present value of this
lockbox arrangement?
74.
The Eliot Co. needs $185,000 a week to pay bills. The standard deviation of
the weekly disbursements is $17,600. The firm has established a lower cash
balance limit of $75,000. The applicable interest rate is 5.5 percent and the
fixed cost of transferring funds is $47. Based on the BAT model, what is the
optimal initial cash balance?
75.
Theo's Bar & Grill needs $153,000 a week to pay bills. The standard
deviation of the weekly disbursements is $9,600. The firm has established a
lower cash balance limit of $40,000. The applicable interest rate is 3.5
percent and the fixed cost of transferring funds is $40. Based on the BAT
model, what is the optimal average cash balance?
76.
Parkway Express needs $318,000 a week to pay bills. The standard
deviation of the weekly disbursements is $31,000. The firm has established
a lower cash balance limit of $60,000. The applicable interest rate is 4.5
percent and the fixed cost of transferring funds is $65. Based on the BAT
model, what is the opportunity cost of holding cash?
77.
Penco Supply spends $325,000 a week to pay bills and maintains a lower
cash balance limit of $75,000. The standard deviation of its disbursements
is $18,900. The applicable interest rate is 5 percent and the fixed cost of
transferring funds is $65. What is the firm's optimal initial cash balance
based on the BAT model?
78.
Your firm spends $54,000 a week to pay bills and maintains a lower cash
balance limit of $45,000. The standard deviation of your disbursements is
$12,100. The applicable interest rate is 4.5 percent and the fixed cost of
transferring funds is $55. What is your opportunity cost of holding cash
based on the BAT model?
79.
Rosie O'Grady's spends $115,000 a week to pay bills and maintains a lower
cash balance limit of $95,000. The standard deviation of the disbursements
is $14,600. The applicable interest rate is 4.8 percent and the fixed cost of
transferring funds is $50. What is this firm's total cost of holding cash based
on the BAT model?
80.
Your firm spends $346,000 a week to pay bills and maintains a lower cash
balance limit of $150,000. The standard deviation of your disbursements is
$28,700. The applicable interest rate is 5 percent and the fixed cost of
transferring funds is $60. What is your optimal average cash balance based
on the BAT model?
81.
The Cow Pie Spreader Co. spends $214,000 a week to pay bills and
maintains a lower cash balance limit of $150,000. The standard deviation of
the disbursements is $16,000. The applicable weekly interest rate is 0.025
percent and the fixed cost of transferring funds is $49. What is the firm's
cash balance target based on the Miller-Orr model?
82.
The Blue Moon Hotel and Spa spends $359,000 a week to pay bills and
maintains a lower cash balance limit of $250,000. The standard deviation of
the disbursements is $46,800. The applicable weekly interest rate is 0.045
percent and the fixed cost of transferring funds is $60. What is the hotel's
optimal upper cash limit based on the Miller-Orr model?
