Cross Collectibles Currently Fills Mail Orders from All Over the U.S

question 44

Multiple Choice

Cross Collectibles currently fills mail orders from all over the U.S. and receipts come in to headquarters in Little Rock, Arkansas. The firm's average accounts receivable (A/R) is $2.5 million and is financed by a bank loan with 11 percent annual interest. Cross is considering a regional lockbox system to speed up collections which it believes will reduce A/R by 20 percent. The annual cost of the system is $15,000. What is the estimated net annual savings to the firm from implementing the lockbox system?

• A) $500,000
• B) $ 30,000
• C) $ 60,000
• D) $ 55,000
• E) $ 40,000

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Definitions:

Harlow's Studies

Harlow's Studies refer to the psychological experiments conducted by Harry Harlow, notably on attachment, using rhesus monkeys to investigate the importance of caregiving and companionship.

Attachment

The emotional bond that forms between individuals, significant in child development theories.

Caregiver

An individual who assists with another's needs or dependents, such as children, the elderly, or individuals with disabilities.

Nutritional Reward

The positive or pleasurable feedback received from consuming certain foods, which can influence eating behaviors.