Bulldogs Inc. is a retail mail order firm that currently uses a centralized collection system that requires all checks to be sent to its flotation headquarters. An average of 6 days is required for mailed checks to be received, 3 days for Bulldogs Inc. to process them, and 2 days for the checks to clear through its bank. A proposed lockbox system would decrease the mailing and processing time to 2 days and the check clearing time for 1 day. Bulldogs Inc. has an average daily collection of P250,000. If Bulldogs Inc. adopts this proposed lockbox system, its average cash balance will increase by * A P1,200,000 O P2,000,000 P750,000 P450,000
Bulldogs Inc. is a retail mail order firm that currently uses a centralized collection system that requires all checks to be sent to its flotation headquarters. An average of 6 days is required for mailed checks to be received, 3 days for Bulldogs Inc. to process them, and 2 days for the checks to clear through its bank. A proposed lockbox system would decrease the mailing and processing time to 2 days and the check clearing time for 1 day. Bulldogs Inc. has an average daily collection of P250,000. If Bulldogs Inc. adopts this proposed lockbox system, its average cash balance will increase by * A P1,200,000 O P2,000,000 P750,000 P450,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bulldogs Inc. is a retail mail order firm that currently uses a centralized collection system that
requires all checks to be sent to its flotation headquarters. An average of 6 days is required for
mailed checks to be received, 3 days for Bulldogs Inc. to process them, and 2 days for the
checks to clear through its bank. A proposed lockbox system would decrease the mailing and
processing time to 2 days and the check clearing time for 1 day. Bulldogs Inc. has an average
daily collection of P250,000. If Bulldogs Inc. adopts this proposed lockbox system, its average
cash balance will increase by * O
O P1,200,000
O P2,000,000
P750,000
P450,000
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