The Benefits of a Lockbox Arrangement with a Bank Are

question 91

Multiple Choice

The benefits of a lockbox arrangement with a bank are maximized when

• A)the bank is located nearby to the company,so remittance advices can be delivered to the company every day.
• B)several banks around the country are used,in order to minimize the time payments spend in the mail.
• C)an arrangement is made with only one bank,so all remittance advices can be batched for processing.
• D)the bank deposits the payments and accesses the customer's information system to record the payments.

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Definitions:

Uncertainty

A situation in which the lack of certain knowledge about present circumstances or future outcomes makes it impossible to predict risks accurately.

Mechanism Design

A field in economics and game theory that seeks to design rules or incentives for a system to achieve a desired objective, considering individuals' private information and incentives.

Welfare Policy

A governmental strategy designed to support the wellbeing of citizens, often through financial aid, healthcare, and education.

Health Insurance

A type of insurance that covers the whole or part of the risk of a person incurring medical expenses, spreading the risk over numerous individuals.