This is one day's cash disbursements, not the amount the company would be willing to pay for the new cash management system.
This is one-half of day's cash disbursements, not the amount the company would be willing to pay for the new cash management system.
In order to answer this question, we need to calculate the additional interest the company will earn during the year on the additional investable funds. If it delays disbursements by 2 days and its daily cash outflows are $3,000,000 per day, it will have $6,000,000 in additional investable funds. This will provide $600,000 per year in interest (10% of $6,000,000), and this is therefore also the maximum amount that the company should pay for this service per year.
This is the increase in the cash balance that the company will experience from the new system, not the amount that they are willing to pay for it.
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