Question

Simon Corporation receives $65,000 in cash every day. According to a recent review of its collections, it took consumers' payments 2.5 days on average to reach them in the mail. The payments are processed in 1.5 days after they are received. It typically takes 3 days for payments to clear the banking system after they are placed. Would it be financially advisable for the company to pay a$16,500 annual fee to shorten the collection float by three days if the company's opportunity cost is 11%? Why or why not, please.

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