Carter & Carter Is Considering Setting Up a Regional Lockbox

question 63

Multiple Choice

Carter & Carter is considering setting up a regional lockbox system to speed up collections.The company sells to customers all over the U.S., and all receipts come in to its headquarters in San Francisco.The firm's average accounts receivable balance is $2.5 million, and they are financed by a bank loan at an 11% annual interest rate.The firm believes this new lockbox system would reduce receivables by 20%.If the annual cost of the system is $15,000, what pre-tax net annual savings would be realized?

• A) $29,160
• B) $32,400
• C) $36,000
• D) $40,000
• E) $44,000

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Definitions:

Communal

Referring to sharing or holding in common by a community or group, often related to resources or living spaces.

Agentic Goals

Goals that focus on achieving personal power or influence, often emphasizing individual action and success.

Self-image Congruence

A concept where consumers prefer products or brands that they perceive to match or align with their own self-image or identity.

Gender Preferences

Involves individuals' inclinations towards certain genders, which can influence attractions, relationships, or identity.