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Neo
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Category: Homework
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Experience:  BS Accounting
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Solve the following problem and please show your work. Normas

Customer Question

Solve the following problem and please show your work.

Norma’s Cat Food of Shell Knob ships cat food throughout the country. Norma has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by two and one-half days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Iowa.

a. If the company has $5 million per day in collections and $3 million per day in disbursements, how many dollars will the cash management system free up?

b. If the company can earn 8 percent per annum on freed-up funds, how much will the income be?

c. If the annual cost of the new system is $800,000, should it be implemented?
Submitted: 4 years ago.
Category: Homework
Expert:  Neo replied 4 years ago.
THIS ANSWER IS LOCKED!

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Customer: replied 4 years ago.
Sorry, just now checking my email. I'll review and let you know if questions. If not, I'll accept answer.

Thank you so much for your help:)
Expert:  Neo replied 4 years ago.

Ok. No problem.

Customer: replied 4 years ago.
Hi Neo --

Need your help to solve the following problem:

IP Inc is expected to pay $1.70 dividends next year. The dividend growth rate is expected to be 7% forever. If the required rate of return for IP is 10% calculate the price of the stock using the constant growth model. If the stock is currently selling for $63, indicate whether the stock is underpriced or overpriced.

please show your work. Thanks so much for your help.
Expert:  Neo replied 4 years ago.
Good day!

Please create new page request for this one and please add "For Neo" at the beginning of the new thread.

Thank you so much! :)