You Are Considering Implementing a Lockbox System for Your Firm

question 110

Multiple Choice

You are considering implementing a lockbox system for your firm. The system is expected to reduce the collection time by 3 days. On an average day, your firm receives 680 cheques with an average value of $99 each. The daily interest rate on Treasury bills is.0125 %. The bank charge per cheque would be $.15. What is the anticipated daily savings if this system is implemented?

• A) $23.18
• B) $24.07
• C) $25.25
• D) $25.92
• E) $26.03

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Definitions:

Total Revenue

The total amount of money generated by a company or entity from its business activities, such as sales of goods or services, before any expenses are subtracted.

Opposite Direction

A concept reflecting movement, tendency, or orientation diametrically different from a reference point or direction.

Relatively Elastic

Describes a supply or demand curve in economics that shows a greater sensitivity or responsiveness to changes in price.

Price-Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.