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 is the Value of the proposal?

Multiple Choice

• $2,400,000

• $3,400,000

• $4,400,000

• $5,400,000

• $6,400,000

The quickest, most expensive way to make funds available is by using a:

Multiple Choice

• Depository transfer check (DTC)

• Cash concentration system

• Cash collection point

• Automated clearinghouse (ACH)

• Wire transfer