A Firm Has a Daily Average Collection of Checks Equal

question 121

True/False

A firm has a daily average collection of checks equal to $250,000. It takes the firm approximately 4 days to convert the funds into usable cash. Assume (1) a lockbox system could be employed which would reduce the cash conversion procedure to 2 ½ days and (2) the firm could invest any additional cash received at 6 percent after taxes. The lockbox system would be a good buy if it costs only $23,000 annually.

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Definitions:

Repressive

Pertaining to the act of restraining, preventing, or inhibiting expressions, thoughts, or behaviors.

Nominal

A term referring to values or categories that are names or labels without a natural order or ranking.

Meditation

A practice of mindfulness or concentration to achieve a mentally clear and emotionally calm state.

Physiological Arousal

A physical state of heightened alertness and readiness, typically involving increased heart rate, blood pressure, and sensory alertness.