finance homework 7

finance homework 7 - in cash collection is to reduce the...

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Evan D’Agostino November 5, 2007 BUS330 1. The primary concern should be for safety and liquidity rather than maximization of profit it is good during market volatility and it give you lower interest rates. 2. For people who wish to enjoy the benefits of faster check clearance at lower rates, a lock box system is the best, which may replace the network of regional collection offices. Under this plan the customers are requested to forward their checks to a post box office in their geographic region and a local bank picks up the checks. The bank can then process the local check at a local clearing house for rapid collection and have the funds available for use that day. 3. Float management involves controlling the collection and disbursement of cash, the objective
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Unformatted text preview: in cash collection is to reduce the lag between time customer pays and the time checks clear. The objective of cash disbursement is to slow down payments, increase time when checks are written, and received; in other words collect early, pay late. 7. Average collection period, Ratio of bad debts to credit sales, aging of accounts receivable 8. The five key elements a borrower should have to obtain credit : character, capacity , capital collateral , conditions. 3. A. $3,500,000 B. $315,000 C. No 4. A. $61,600 B.$74,280 5. 42 Days 6. $108,000 7. 35 Days, Less Lenient 8. $72,000 10. A. 300 B. 40 times a year C. 150...
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finance homework 7 - in cash collection is to reduce the...

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