Examlex

Solved

Carter & Carter Is Considering Setting Up a Regional Lockbox

question 63

Multiple Choice

Carter & Carter is considering setting up a regional lockbox system to speed up collections.The company sells to customers all over the U.S., and all receipts come in to its headquarters in San Francisco.The firm's average accounts receivable balance is $2.5 million, and they are financed by a bank loan at an 11% annual interest rate.The firm believes this new lockbox system would reduce receivables by 20%.If the annual cost of the system is $15,000, what pre-tax net annual savings would be realized?


Definitions:

Population

The total number of organisms, humans, or objects of interest within a specified area or amongst a particular group being studied or counted.

Personally Distressing

Experiencing discomfort or distress on a personal level due to specific circumstances or conditions.

Helplessness

A psychological state where an individual perceives they have no control over their situation, leading to decreased motivation and ability to manage future situations.

Overwhelmed

A feeling of being excessively burdened or overloaded, either emotionally or cognitively.

Related Questions