Carter & Carter Is Considering Setting Up a Regional Lockbox

question 63

Multiple Choice

Carter & Carter is considering setting up a regional lockbox system to speed up collections.The company sells to customers all over the U.S., and all receipts come in to its headquarters in San Francisco.The firm's average accounts receivable balance is $2.5 million, and they are financed by a bank loan at an 11% annual interest rate.The firm believes this new lockbox system would reduce receivables by 20%.If the annual cost of the system is $15,000, what pre-tax net annual savings would be realized?

• A) $29,160
• B) $32,400
• C) $36,000
• D) $40,000
• E) $44,000

---

Definitions:

Supergroup

In biological classification, a grouping that is higher than a kingdom, incorporating a vast array of life forms based on genetic similarities and evolutionary relationships.

Cellular Slime Molds

Organisms that exist as individual amoeboid cells but can aggregate to form multicellular reproductive structures under certain conditions.

Representative Clade

A group of organisms that together represent a branch of the tree of life, sharing a common ancestor.

Supergroup

In biology, a high-level taxonomic rank above the group level, often used in the classification of life forms that share common evolutionary traits.