You Are Considering Implementing a Lockbox System for Your fiRm

question 270

Multiple Choice

You are considering implementing a lockbox system for your firm. The system is expected to reduce the collection time by 2 days. On an average day, your firm receives 460 cheques with an average
Value of $350 each. The daily interest rate on Treasury bills is .01 percent. The bank charge per
Cheque would be $.20. What is the anticipated daily cost of the lockbox system?

• A) $16.10
• B) $92.00
• C) $108.10
• D) $123.60
• E) $161.00

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Definitions:

Performance Level

A measure of an individual, organization, or system's efficiency, effectiveness, and ability to meet its goals.

Excess Capacity

Refers to the situation where a firm or economy can produce more goods or services than currently produced due to available resources not being fully utilized.

Efficiency

The extent to which time, effort, or cost is well used for the intended task or purpose within supply chain processes.

C2C Cycle

The cycle within consumer-to-consumer transactions, from one individual to another, typically facilitated by third-party platforms.