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Ssved Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 400o payments a day will be
Ssved Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 400o payments a day will be made to lock boxes with an average payment size of $3,000. The bank's charge for operating the lock boxes is $0.50 a check. The interest rate is 0.012% per day. a. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. (Do not round Intermedlate calculations.) Daly interest saved b. Is it worthwhile to adopt the systern? o Yes O No es c. What minimum reduction in the time to collect and process each check is needed to justify use of the lock-box system? (Do not round Intermedlate colculations. Round your answer to 2 declmel places) inimum reducson in tme 1.39 days
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