The lockbox system Exam Question

The lockbox system Exam Question


The lockbox system Exam QuestionThe lockbox system Exam Question

Question Description
I’m studying and need help with a Management question to help me learn.

I need someone to help me with an exam that has 7 calculation questions.

the exam will have similar questions just like those examples

Fargo Memorial Hospital has annual patient service revenues of $14,400,000. It has two major third-party payers, and some of its patients are self-payers. The hospital’s patient accounts manager estimates that 10% of the hospital’s billings are paid (received by the hospital) on Day 30, 60% are paid on Day 60, and 30% are paid on Day 90. (5% of total billings end up as bad debt losses, but that figure is not relevant to this problem.)

D) Suppose the hospital’s annual cost of carrying receivables is 10%. If the electronic claims system costs $30,000 a year to lease and operate, should it be adopted? (Assume that the entire receivables balance has to be financed.)

Drugs R Us operates a mail-order pharmaceutical business in San Francisco. The firm receives an average of $325,000 in payments per day. On average, it takes four days from the time customers mail their checks until the firm receives them. The company is considering establishing a lockbox system, in which customers’ pay- ments would be sent to nearby banks (local in terms of the purchasers) instead of directly to San Francisco. Banks in the lockbox locations would then wire the daily receipts to a single (concentration) bank.

The lockbox system, which would consist of ten local depository banks and a concentration bank, would cost Drugs R Us a total of $6,500 per month. Under this system, customers’ checks would be received at the ten lockbox locations one day after they are mailed, and the daily total from each of the ten lockbox locations would be wired to the concentration bank at a cost of $9.75 per transfer.

The lockbox system Exam Question – Nurses Homework | Nurses Homework

Assume that the firm could earn 10 percent on short-term investments; further assume 260 working days, and hence 260 transfers from each lockbox loca- tion, per year.

What is the total annual cost of operating the lockbox system?
What is the dollar benefit of the system to Drugs R Us?
Should the firm initiate the lockbox system?
Note: I don’t need the answers for those questions . just wanted to make sure you get the idea of how the exam will looks like

You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes.

Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages.

Likewise, large type, large margins, large indentations, triple-spacing, increased leading (space between lines), increased kerning (space between letters), and any other such attempts at “padding” to increase the length of a paper are unacceptable, wasteful of trees, and will not fool your professor.

The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument.

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