Cash Management

I am requesting assistance in solving this assignment. I am a bit confused and am asking for help. I am also requesting for basic details so that my understanding of how to solve this problem wont be confusing to me later. I have attached the requirements of the assignnent. I need this completed assignment by 8pm Central Standard time on October 16, 2013.

Assignment 2: Cash Management

By

 

Wednesday, October 16, 2013 solve the following problem. Norma’s Cat Food of Shell Knob ships cat food throughout the country. Norma has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by two and one-half days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Iowa.

a. If the company has $5 million per day in collections and $3 million per day in disbursements, how many dollars will the cash management system free up?  Justify your answers.

b. If the company can earn 8 percent per annum on freed-up funds, how much will the income be? Justify your answers.

c. If the annual cost of the new system is $800,000, should it be implemented? Explain why or why not.

Turn in your completed work to the M2: Assignment 2 Dropbox byWednesday, October 16, 2013.

30

30

Assignment 2 Grading Criteria	Maximum Points
Correctly calculated that amount in dollars the cash management system will free up and justified the response.			30
Correctly calculated income and justified response.
Clearly explained if the new system should be implemented.
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation.	10
Total:	100

 

Assignment 2: Cash Management

By

Wednesday, October 16, 2013

solve the following problem. Norma’s Cat Food of Shell Knob ships
cat food throughout the country. Norma has determined that through the establishment of local collection
centers around the country, she can speed up the collection of payments by two and on
e
–
half days.
Furthermore, the cash management department of her bank has indicated to her that she can defer her
payments on her accounts by one
–
half day without affecting suppliers. The bank has a remote
disbursement center in Iowa.

a.

If the company has $5
million per day in collections and $3 million per day in disbursements, how
many dollars will the cash management system free up?

Justify your answers.

b.

If the company can earn 8 percent per annum on freed
–
up funds, how much will the income be?
Justify you
r answers.

c.

If the annual cost of the new system is $800,000, should it be implemented? Explain why or why
not.

Turn in your completed work to the M2: Assignment 2 Dropbox byWednesday, October 16, 2013.

Assignment 2 Grading Criteria

Maximum
Points

Correctly calculated that amount in dollars the cash
management system will free up and justified the
response.

30

Correctly calculated income and justified response.

30

Clearly explained if the new system should be
implemented.

30

Wrote in a clear, concise, and organized manner;
demonstrated ethical scholarship in accurate
representation and attribution of sources; displayed
accurate spelling, grammar, and punctuation.

10

Total:

100

Assignment 2: Cash Management
By Wednesday, October 16, 2013 solve the following problem. Norma’s Cat Food of Shell Knob ships
cat food throughout the country. Norma has determined that through the establishment of local collection
centers around the country, she can speed up the collection of payments by two and one-half days.
Furthermore, the cash management department of her bank has indicated to her that she can defer her
payments on her accounts by one-half day without affecting suppliers. The bank has a remote
disbursement center in Iowa.
a. If the company has $5 million per day in collections and $3 million per day in disbursements, how
many dollars will the cash management system free up? Justify your answers.
b. If the company can earn 8 percent per annum on freed-up funds, how much will the income be?
Justify your answers.
c. If the annual cost of the new system is $800,000, should it be implemented? Explain why or why
not.
Turn in your completed work to the M2: Assignment 2 Dropbox byWednesday, October 16, 2013.
Assignment 2 Grading Criteria
Maximum
Points
Correctly calculated that amount in dollars the cash
management system will free up and justified the
response.
30
Correctly calculated income and justified response. 30
Clearly explained if the new system should be
implemented.
30
Wrote in a clear, concise, and organized manner;
demonstrated ethical scholarship in accurate
representation and attribution of sources; displayed
accurate spelling, grammar, and punctuation.
10
Total: 100