A Firm Has Arranged for a Lockbox System to Reduce

question 224

Multiple Choice

A firm has arranged for a lockbox system to reduce the collection time of accounts receivable.Currently the firm has an average collection period of 43 days, an average age of inventory of 50days, and an average payment period of 10 days. The lockbox system will reduce the average collection period by 3 days by reducing processing, mail, and clearing float. The firm's cash conversion cycle .

• A) will not change
• B) increases by 3 days
• C) is 93 days
• D) decreases by 3 days

---

Definitions:

Wealthy Southerners

Individuals from the southern United States before the Civil War who had accumulated wealth, typically through agricultural plantations and the labor of enslaved people.

Military Service

The performance of duty by members of the armed forces or citizens conscripted or enlisted for a period of service to protect and serve their country.

Confederate Hospitals

Medical facilities established by the Confederate States during the American Civil War to treat soldiers injured in battle, often facing challenges such as limited resources and overcrowding.

Jefferson Davis

The President of the Confederate States of America during the American Civil War, from 1861 to 1865.