Average, a Firm Collects Checks Totaling $250,000 Per Day It

question 79

True/False

average, a firm collects checks totaling $250,000 per day It takes the firm approximately 4 days from the day the checks were mailed until they result in usable cash for the firm Assume that (1) a lockbox system could be employed which would reduce the cash conversion procedure to 2 1/2 days and (2) the firm could invest any additional cash generated at 6% after taxes The lockbox system would be a good buy if it costs $25,000 annually.

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Definitions:

Annual Percentage Rate

The Annual Percentage Rate (APR) is the yearly interest rate charged on borrowed money, encompassing both the interest rate and any associated fees, to represent the total cost of borrowing.

Per Month

The term per month is used to describe or quantify an event, action, or measurement over the period of a month.

Compounded Monthly

A method of calculating interest where the interest earned on an investment is reinvested and earns additional interest in subsequent periods on a monthly basis.

Monthly Payments

Regular payments made over a set period of time, such as those for loans or subscriptions, calculated on a monthly basis.