A Firm That Is Located in New York Receives on the Average

question 67

Multiple Choice

A firm that is located in New York receives on the average 2,000 checks a day from its customers in the Twin Cities area.Average payment per check is $1,500.A bank in the Twin Cities is offering a lock-box arrangement for collection and processing of these checks at a cost of $0.50 per check.This arrangement will reduce the float by 2 days.The daily interest rate for the firm is 0.02%.What is the net saving from the lock-box arrangement?

• A) $200
• B) $400
• C) $1,000
• D) $1,200

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Definitions:

Inferential Statistics

Statistical methods that allow conclusions to be drawn about populations based on sample data.

Descriptive Statistics

Statistical methods used to summarize, describe, and present data in an informative way, typically through measures of central tendency and variability.

External Validity

The extent to which the results of a study can be generalized to other situations, populations, or environments.

Greater Population

Refers to the larger portion or majority of individuals within a specified group or area.