Purchase Solution

Conducting cost-benefit analysis of cash management

Not what you're looking for?

Ask Custom Question

Nicholas Birdcage Company of Hollywood ships cages throughout the country. Nicholas has determined that through the establishment of local collection centers around the country, he can speed up the collection of payments by one and one-half days. Furthermore, the cash management department of his bank has indicated to him that he can defer his payments on his accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Florida.
1. If the company has $4 million per day in collections and $2 million per day in disbursements, how many dollars will the cash management system free up?
2. If the company can earn 9 percent per annum on freed-up funds, how much will the income be?
3. If the total cost of the new system is $700,000, should it be implemented?

Purchase this Solution
Solution Summary

This solution provides step by step calculations for cash management.

Solution Preview

Nicholas Birdcage Company of Hollywood ships cages throughout the country. Nicholas has determined that through the establishment of local collection centers around the country, he can speed up the collection of payments by one and one-half days. Furthermore, the cash management department of his bank has indicated to him that he can defer his payments on his accounts by ...

Purchase this Solution
Free BrainMass Quizzes
SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

View More Free Quizzes
Related BrainMass Solutions

  • Quality Assurance and Quality Control for Outsourcing

    The cost benefit Analysis versus sending the product from Brazil to CostaRica where bioTD is located for the tests.

  • Cost-Benefit Analysis of Cash Management

    57220 Cost-Benefit Analysis of Cash Management Nicholas Birdcage Company of Hollywood ships cages throughout the country.

  • Discuss different methods for cost effective evaluations

    Below, we'll define, discuss, and provide examples of cost-effectiveness evaluation, cost/benefit evaluation, cost saving analysis, and utility analysis for methods of evaluating the costs of training for the organization.

  • Risk Identification, Assessment and Strategies in Security

    Step 3: Conduct Cost-Benefit Analysis In this step, cost-benefit analysis is performed to identify cost effective controls Step 4: Select Control On the basis of cost-benefit analysis, the optimum control is selected; the one which combines technical

  • Public Expenditures and Cost-Benefit Analysis

    505690 Public Expenditures and Cost-Benefit Analysis Imagine you are conducting a cost-benefit analysis. How do you plan to use this when making decisions about public expenditures? Is it necessary in the decision-making process?

  • Cost-benefit evaluation and cost-effectiveness evaluation

    The method of cost-benefit analysis can be understood as an economic evaluation of the program. Cost-effectiveness analysis can be defined as the evaluation of effectiveness of cost to gain proposed output of the training program.

  • Cash management techniques

    154029 Cost Benefit Analysis of Cash Management - City Farm Insurance City Farm Insurance has collection centers accross the country to speed up collections.

  • Customer Relationship Cost Benefit Analysis

    172935 Customer Relationship and Cost Benefit Analysis Please provide a cost benefit analysis on customer relationship management for a hotel/resort project. Dear Student, Thank you for selecting BrainMass to assist you.

  • Securities and Exchange Commission

    It is also termed as benefit-cost analysis and is beneficial for the purpose of right decision making. In relation to the process of cost-benefit analysis, the discounted rate is applied to the flow of cash.

View More Related Solutions