Arshadi Wineries Is Considering the Purchase of Lockbox Services from Bob's

question 333

Multiple Choice

Arshadi Wineries is considering the purchase of lockbox services from Bob's Bank. Currently, it
takes six days to collect funds from customers; this would be reduced by two days with the lockbox
system. The average number of payments received per day is 300 and the average cheque size is
$150. Bob's will charge 5¢ per cheque in return for operating the lockbox system. Assume one-year
T-bills yield 5%, and use a 360-day year.
What is the maximum acceptable cost per cheque that Arshadi Wineries could pay and still find the
System acceptable?

• A) 2.5¢
• B) 3.0¢
• C) 3.5¢
• D) 4.0¢
• E) 4.5¢

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Definitions:

Proactive Interference

A phenomenon where older memories interfere with the recall of newer memories.

Decay

The process of decline in quality, power, or vigor, often used in the context of physical objects deteriorating or the fading of memories over time.

Cue-dependent Forgetting

The inability to recall information in the absence of specific cues or contexts that were present at the time the memory was formed.

Original Memory

The initial encoding of information into the memory system, before any subsequent alterations or modifications.