What dollar amount of savings would a project show if it reduced your outstanding Accounts Receivable by $0.9 million dollars to $3.5 million total and your organizations marginal cost of capital was 5.7%?
Given answer is correct.
Calculation = Savings of 0.9 Million Dollars multiplied with Cost-Of-Capital.
=> 0.9 x 5.7% = 5.13 (which looks very similar to $51,300)
You don't need to add zeros to make it a million, just look at 5.13 and you can easily tell that 51,300 looks like a perfect match.
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InvisibleBeing
1 year, 5 months ago