Cow Chips,Inc

question 5

Multiple Choice

Cow Chips,Inc.,a large fertilizer distributor based in California,is planning to use a lockbox system to speed up collections from its customers located on the East Coast.A Philadelphia-area bank will provide this service for an annual fee of $25,000 plus 12 cents per transaction.The estimated reduction in collection and processing time is one day.The average customer payment in this region is $8,200.Treasury bills are currently yielding 5 percent per year.Assume a year has 365 days.Approximately how many customers each day,on average,are needed to make the system profitable for Cow Chips,Inc.?

• A)56
• B)68
• C)74
• D)83
• E)89

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Definitions:

Mode

The datum that is most recurrent in a given data set.

Set Of Data

A collection of related information or numerical values that are analyzed or used in statistics and research.

Mode

The most frequently occurring value within a data set.

Set Of Data

A collection of related information or values that are typically measured, observed, or collected from experiments or surveys.