If a Company Can Implement Cash Management Systems and Save

question 62

Multiple Choice

If a company can implement cash management systems and save 3 days by reducing remittance time and 1 day by increasing disbursement time based on $2,000,000 in average daily remittances and $2,500,000 in average daily disbursements and their return on freed up funds is 10%, what is the max they should spend on the system?

• A) $2,000,000
• B) $650,000
• C) $850,000
• D) $1,000,000

Understand how to prepare an income statement including variance analysis.

Understand the concept and purpose of budgets in organizations.

Recognize different types of budgeting procedures and their specific applications.

Identify the steps involved in the budgeting process.

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Definitions:

Least-cost Means

Selecting the most cost-effective approach to achieve a given objective without compromising the quality or outcome.

Shipping Supplies

Materials and items used for packing and sending goods to recipients.

Origins

The point or place where something begins, arises, or is derived.