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

Understand the standards and procedures for extending credit in a business-to-business context.

Learn how to acknowledge customer orders and requests effectively and professionally.

Comprehend the process of handling order and credit routine messages, including acknowledgment messages.

Understand the responsibilities and ethical considerations in providing credit information.

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Definitions:

Cognitive Readiness

The mental preparation and ability to learn or adapt to situations effectively.

Vocational Choices

Refers to the selection of occupations or professions based on individual preferences, skills, and interests.

Educational Choices

Decisions related to the pursuit of learning, including the selection of courses, programs, institutions, and modes of study.

Holland's Personality Types

A theory that categorizes people into six personality types—Realistic, Investigative, Artistic, Social, Enterprising, and Conventional—to help explain career choices.