What Are the Expected Annual Savings from a Lock-Box System

question 103

Multiple Choice

What are the expected annual savings from a lock-box system that collects 150 checks per day averaging $500 each, and reduces mailing and processing times by 2.5 and 1.5 days, respectively, if the annual interest rate is 7%?

• A) $5,250
• B) $13,125
• C) $21,000
• D)$300,000