On Average, a Firm Collects Checks Totaling $250,000 Per Day

question 97

True/False

On average, a firm collects checks totaling $250,000 per day.It takes the firm approximately 4 days from the day the checks were mailed until they result in usable cash for the firm.Assume that (1) a lockbox system could be employed which would reduce the cash conversion procedure to 2 1/2 days and (2) the firm could invest any additional cash generated at 6% after taxes.The lockbox system would be a good buy if it costs $25,000 annually.

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Definitions:

Company's Strategy

A plan devised by organizations to achieve overarching goals and secure a competitive position in the market.

Work Flow Design

The process of defining the optimal course of action and organization of work tasks to ensure efficient completion of work processes.

Production

The process of creating goods and services through the combination of labor, materials, and technology.

Work Flow Analysis

The study of the flow of work among individuals and groups within an organization, aimed at improving efficiency and effectiveness.