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:

Ideal Refrigerant

is a theoretical concept for a substance used in refrigeration that has optimal thermodynamic and physical properties, such as being non-toxic, environmentally friendly, and highly efficient in heat absorption and release.

Non-Combustible

Materials or substances that are incapable of igniting and burning, used in various safety applications to prevent fire.

Boil Temperatures

The temperature at which a liquid turns into vapor, which varies depending on the atmospheric pressure and the liquid's properties.

A/C Circuit

An alternating current (A/C) circuit, in which the flow of electric charge periodically reverses direction, typically used in household and industrial power.