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Eastern Electric currently takes 10 days to collect and deposit checks from customers. A lock-box system could reduce this time to 5 days. Collections average
Eastern Electric currently takes 10 days to collect and deposit checks from customers. A lock-box system could reduce this time to 5 days. Collections average $50,000 daily. The interest rate is 0.03% per day. If the lock-box service is offered for a fixed monthly fee. What is the maximum monthly fee that Eastern's should be willing to pay for this service? (Assume a 30-day month.)
a.$750
b.$2,250
c.$2,500
d.$3,000
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