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Find net annual benefit if collection agent offer accepted

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Cash management strategies. Collection agency.

ABC Company has an average monthly cash receipt in the amount of Php3,300,000. It has an average collection period of 20 days. A collection agency has offered to be the company's collector and shorten collection period by 5 days for a monthly fee of Php3,500. The company can invest its excess funds in money market placement at a rate of 10%.

Problem 1: Determine the net annual benefit if the collection agent's offer is accepted.

Reference no: EM132687059

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