The Mesa Bank Is Offering Your Company the Use of Their

question 54

Essay

The Mesa Bank is offering your company the use of their lockbox services. They estimate that you can reduce your average mail time by 2 days and they can save you a combined clearing and processing time of 1.5 days by putting the checks into the clearing system sooner. The firm receives 320 checks a day on average written for $2,500. The current T-Bill rate is 4% or .0107% per day.
What is the savings float and what can you earn if the firm takes Mesa's lockbox service?

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Definitions:

Account Penetration

The effectiveness of a company's sales efforts in selling additional products or services to existing customers.

Order Getting

A sales activity that involves identifying potential customers and persuading them to make a purchase.

Sales Power

The ability or capacity of an individual or team to successfully sell products or services, often measured by sales volume or revenue generated.

Excellent Execution

The highly successful implementation of a plan, project, or strategy, marked by effectiveness and efficiency.