You Are Considering Implementing a Lockbox System for Your Firm

question 309

Multiple Choice

You are considering implementing a lockbox system for your firm. The system is expected to reduce the collection time by 2 days. On an average day, your firm receives 1,650 checks with an average value of $910 each. The daily interest rate on Treasury bills is.02 %. The bank charge per check would be $.35. What is the net present value of this lockbox arrangement?

• A) $115,500
• B) $212,750
• C) $300,300
• D) $525,525
• E) $600,600

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Definitions:

Huff Coughing

A technique to clear mucus from the lungs by taking a deep breath and forcefully exhaling in a series of "huff" sounds.

Spinal Anesthesia

A type of regional anesthesia involving the injection of a local anesthetic into the cerebrospinal fluid surrounding the spinal cord, blocking sensation from the lower body.

Spinal Headaches

Headaches that occur from a leakage of cerebrospinal fluid, often after a lumbar puncture procedure.

Supine

A posture in which an individual rests on their back, looking upwards, commonly employed during medical assessments or interventions.