2. The Zindler Company currently has a centralized billing system. Payments are made by all customers to
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2. The Zindler Company currently has a centralized billing system. Payments are made by all customers to the central billing location. It requires, on the average, 4 days for customers' mailed payments to reach the central location. An additional 14days are required to process payments before a deposit can be made. The firm has a daily average collection of $500,000. The company has recently investigated the possibility of initiating a lockbox system. It has estimated that with such a system, customers' mailed payments would reach the receipt location % days sooner. Further, the processing time could be reduced by 1 additional day, because each lockbox bank would pick up mailed deposits twice daily.
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