Whitmer Inc

question 76

Multiple Choice

Whitmer Inc.sells to customers all over the U.S. ,and all receipts come in to its headquarters in New York City.The firm's average accounts receivable balance is $2.5 million,and they are financed by a bank loan at an 6.75% annual interest rate.The firm is considering setting up a regional lockbox system to speed up collections,and it believes this 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) $22,313
• B) $16,313
• C) $18,750
• D) $21,375
• E) $20,438

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Definitions:

Neighbour's Property

Issues and laws concerning the rights and responsibilities between adjoining landowners, including boundary disputes and nuisances.

Pool

A common fund or resource created by the contribution of several individuals or entities, often for shared use or investment purposes.

Tort Of Trespass

A wrongful invasion or intrusion upon another person's land or property without their permission or legal right.

Wrong Person's Garage

A situation involving mistakenly entering or using someone else's garage premises, potentially leading to trespassing or property disputes.