Question

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. 1) If the company currently averages $50,000 in collections per day, how many dollars will this suggested cash management system free up?

Answer 1

$100,000

Step-by-step explanation:

The computation of the amount of dollars that suggested for free up the cash management system is shown below:

= Average collection period × current average collections per day

= 2 days × $50,000

= $100,000

We simply applied the above formula so that the correct amount could come and the same is to be applied