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Roxy Is Evaluating a Lock-Box System That Will Reduce Float

question 30

Multiple Choice

Roxy is evaluating a lock-box system that will reduce float by 6 days.The firm has annual sales of $180 million and an opportunity cost of 12%.If the lock-box system is adopted,what is the amount of funds released?


Definitions:

Market Inefficiency

This occurs when resources are not allocated optimally in a market, resulting in lost potential value.

Market Outcome

The result of all the buying and selling activities within a particular market, including price levels and quantities traded.

Equitable

Equitable refers to something characterized by fairness, impartiality, and justice, particularly in the way people are treated or decisions are made.

Market Failure

When the free market's distribution of goods and services is inefficient, it typically results in a reduction of societal welfare.

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