Short-term investments made possible by the freed-up cash

Assignment Help Financial Management

Reference no: EM131501041

City Farm Insurance has collection centers across the country to speed up collections. The company also makes its disbursements from remote disbursement centers so the firm's checks will take longer to clear the bank. Collection time has been reduced by four days and disbursement time increased by two days because of these policies. Excess funds are being invested in short-term instruments yielding 4 percent per annum.

a. If City Farm has $4.15 million per day in collections and $3.20 million per day in disbursements, how many dollars has the cash management system freed up? (Enter your answer in dollars not in millions (e.g., $1,234,567).)

Freed up funds=

b. How much can City Farm earn in dollars per year on short-term investments made possible by the freed-up cash? (Enter your answer in dollars not in millions (e.g., $1,234,567).)

Interest on freed up cash =

Reference no: EM131501041

Questions Cloud

Calls during a particular minute : If the distribution of calls is Poisson, what is the probability of receiving at least 4 calls during a particular minute?

What is the after-tax cash flows from selling old machine : What is the after-tax cash flows from selling the old machine? Compute the relevant initial outlay in this capital budgeting decision?

Conduct a literature review for your scholarly project : Literature reviews form the foundation for every academic product, You will conduct a literature review for your Scholarly Project

Minutes with a standard deviation : A random sample of 20 waiting times has a mean of 3.7 minutes with a standard deviation of 2.1 minutes.

Short-term investments made possible by the freed-up cash : How much can City Farm earn in dollars per year on short-term investments made possible by the freed-up cash?

The steps an injured worker must take once an injury occurs : Discuss the steps an injured worker must take once an injury occurs on the job. What are some of the critical data elements that must be collected on a work.

What is the projected net income : A proposed new investment has projected sales of $830.000. What is the projected net income?

Provide an overview of the case : Provide an overview of the case and discuss which classification the case would fall in (medical treatment, temporary disability, permanent disability etc.).

Justify the reason they were a good or bad leader : The two leaders are Fidel Castro (bad) and Nelson Mendela (good). Provide three separate reasons (with referenced examples) to justify the reason they were a good, or bad leader

User Account

All Pages