Coyote Valley Products
Coyote Valley Products has daily cash collections of $500,000. The cash management staff has determined (1) customers’ payments are in the mail an average of 3 days; (2) processing after receipt averages 1 day; and (3) after deposit funds are cleared on average in 2 days. Assume a 365 day year.

-Coyote Valley's bank,Grand Lake National,proposes a lock-box collection and processing arrangement that will reduce collection float by 2 days.If the system will cost Coyote Valley $115,000 per year,what is the minimum opportunity cost of funds that would make the system beneficial?

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Coyote Valley Products
Coyote Valley Products has daily cash collections of $500,000. The cash management staff has determined (1) customers’ payments are in the mail an average of 3 days; (2) processing after receipt averages 1 day; and (3) after deposit funds are cleared on average in 2 days. Assume a 365 day year.

-Coyote Valley's bank,Grand Lake National,proposes a lock-box collection and processing arrangement that will reduce collection float by 2 days.If the system will cost Coyote Valley $115,000 per year,what is the minimum opportunity cost of funds that would make the system beneficial?

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The Answer of Coyote Valley Products
Coyote Valley Products has daily cash collections of $500,000. The cash management staff has determined (1) customers’ payments are in the mail an average of 3 days; (2) processing after receipt averages 1 day; and (3) after deposit funds are cleared on average in 2 days. Assume a 365 day year.

-Coyote Valley's bank,Grand Lake National,proposes a lock-box collection and processing arrangement that will reduce collection float by 2 days.If the system will cost Coyote Valley $115,000 per year,what is the minimum opportunity cost of funds that would make the system beneficial?

Coyote Valley Products Coyote Valley Products Has Daily Cash Collections of $500,000. the of $500,000