a retail mail order firm that currently uses a central collection system that requires all checks to be sent to its Boston headquarte s required for mailed checks to be received, 3 days for DLF to process them, and 2 days for the checks to clear through its bank. A n would reduce the mailing and processing time to 2 days and the check clearing time to 1 day. DLF has an average daily collectic dopts the lockbox system, its average cash balance will increase by the correct response: P450,000 P1,200,000 P750,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Item 2
DLF is a retail mail order firm that currently uses a central collection system that requires all checks to be sent to its Boston headquarters. An average of 6
days is required for mailed checks to be received, 3 days for DLF to process them, and 2 days for the checks to clear through its bank. A proposed lockbox
system would reduce the mailing and processing time to 2 days and the check clearing time to 1 day. DLF has an average daily collection of P150,000. If
DLF adopts the lockbox system, its average cash balance will increase by
Select the correct response:
O P450,000
O P1,200,000
O P750,000
O P600.000
Transcribed Image Text:Item 2 DLF is a retail mail order firm that currently uses a central collection system that requires all checks to be sent to its Boston headquarters. An average of 6 days is required for mailed checks to be received, 3 days for DLF to process them, and 2 days for the checks to clear through its bank. A proposed lockbox system would reduce the mailing and processing time to 2 days and the check clearing time to 1 day. DLF has an average daily collection of P150,000. If DLF adopts the lockbox system, its average cash balance will increase by Select the correct response: O P450,000 O P1,200,000 O P750,000 O P600.000
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