Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 600 payments a day will be made to lock boxes with an average payment size of $2,000. The bank’s charge for operating the lock boxes is $0.30 a check. The interest rate is 0.011% 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 intermediate calculations.) b. Is it worthwhile to adopt the system? multiple choice
Anne Teak, the
a. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. (Do not round intermediate calculations.)
b. Is it worthwhile to adopt the system?
multiple choice
-
Yes
-
No
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 intermediate calculations. Round your answer to 2 decimal places.)
![4
Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 600
payments a day will be made to lock boxes with an average payment size of $2,000. The bank's charge for operating the lock boxes is
$0.30 a check. The interest rate is 0.011% per day.
5
points
eBook
B
Hint
Print
a. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. (Do not round intermediate
calculations.)
Net daily advantage
b. Is it worthwhile to adopt the system?
O Yes
O No
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 intermediate calculations. Round your answer to 2 decimal places.)
Minimum reduction in time
days](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7f8ec8b6-9b01-40d9-b0aa-723fdcc932ac%2F57f1e710-9f92-4a61-9a65-5e9c2184f744%2F9inunao_processed.png&w=3840&q=75)
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