A Company Receives an Average of 280 Cheques a Day

question 100

Multiple Choice

A company receives an average of 280 cheques a day with an average value of $160 a cheque. The annual interest rate is 4%. The current delay in processing and clearing is three days. If the
Company implements a lockbox service that has been proposed to them, the clearing time will be
Reduced by two days. What is the maximum fee per cheque that can be charged by the bank and
Still have the lockbox service be acceptable to the company?

• A) $.0300
• B) $.0351
• C) $.0367
• D) $.0398
• E) $.0400

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Definitions:

SSE

Sum of Squared Errors, a measure of the discrepancy between the data and an estimation model, representing the error between observed and predicted values.

Treatments

In experimental research, the conditions applied to different groups of participants to observe potential changes in behavior or outcomes.

Factor

An element or constituent that contributes to a result or outcome.

Population Means

The average value of a characteristic in a population, and a parameter that is often estimated from sample data.