In: Finance
Proposal #2 would establish local collection centers throughout the region to decrease the time it takes to convert credit payments that are mailed in by check to cash. It is estimated that establishing these collection centers would reduce the average collection time by 2 days.
Amount of dollars that will be freed =Collection per day*2
=50000*2=100000
Amount of savings in interest payment =100000*6% =6000
NO it should not be implemented if annual cost is 8000 as the
interest savings is less than the cost and hence there will be net
expenditure of 2000