Murkywater Company is considering a lockbox system. Its collection delay is currently 12 days. Reduction in mailing
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Question:
Murkywater Company is considering a lockbox system. Its collection delay is currently 12 days. Reduction in mailing time = 1.5 day Reduction in clearing time = 1.5 day Reduction in firm processing time = 1.0 day Total = 4.0 days The following is also known: Daily interest on Treasury bills = 0.025% Average number of daily payments to lockboxes = 4,000 Average size of payment = $400 A local bank has agreed to operate this lockbox system for a fee of $0.25 per check processed. What are the costs associated with the proposal? MULTIPLE CHOICE $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000
****Answer is not $6,000,000
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