Flashbinder Guitars,Inc

question 162

Multiple Choice

Flashbinder Guitars,Inc.is considering a lockbox system that will increase its check processing cost by $.15 per check.The company estimates an average check size of $1,700 and expects the lockbox to reduce check collection time by 3 days.What annual before-tax yield must Flashbinder Guitars,Inc.earn on its marketable securities for the lockbox system to be beneficial?

• A) 1.825%
• B) 1.118%
• C) 1.074%
• D) 0.735%

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Definitions:

Total Resistance

Refers to the cumulative resistance within an electric circuit, affecting the overall current flow.

Series RC

A circuit configuration consisting of a resistor (R) and capacitor (C) connected end-to-end or in series with each other, affecting the circuit's overall impedance.

Voltage Drop

The reduction in voltage across components in an electrical circuit, caused by the impedance or resistance of the components.

Capacitive Reactances

The opposition that a capacitor presents to the flow of alternating current, due to its ability to store and release energy in its electric field.