What Is the Annual Gain to a Firm with Daily

question 26

Multiple Choice

What is the annual gain to a firm with daily sales of $30,000 if it can speed up collections by 3 days,assuming an annual opportunity cost of funds of 8%?

• A) $2,400 gain
• B) $7,200 gain
• C) $30,000 gain
• D) $90,000 gain

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Definitions:

Fictitious Payee Rule

A principle in commercial law that protects the drawer of a check if the check is made payable to a non-existent or not intended recipient, under certain conditions.

Bookkeeper

A person responsible for recording the financial transactions and maintaining the financial records of a business.

Negotiable Instruments

Written documents that guarantee the payment of a specific amount of money to the bearer or to a specific person, under certain conditions.

Fraud in the Inducement

A type of fraud that occurs when a person is deceived into entering into an agreement through misrepresentation of material facts.