Porter Corp

question 6

Multiple Choice

Porter Corp. has just signed up for a lockbox. Management expects the lockbox to reduce the mail float by 2.3 days. The firm's sales on average are $41,250 a day, with the average check being $165. The bank charges $0.39 per processed check. Assume that there are 270 business days in a year and the opportunity cost of funds is 5 percent. What will the firm's savings be from using the lockbox?

• A) $3,427.50
• B) $975.50
• C) $2,632.50
• D) $94,875.00

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Definitions:

Density

The mass per unit volume of a substance, often measured in grams per cubic centimeter (g/cm³) or kilograms per cubic meter (kg/m³).

Volume

The amount of space occupied by an object or substance, commonly measured in liters, cubic meters, or gallons.

Material

A substance from which a thing is made or can be made, often used in the context of physical properties and applications.

Density

A measure of mass per unit of volume; the amount of matter contained within a given volume.