Solve this problem and give correct answer Cross Collectibles currently fills mail orders from allover the U.S. and receipts come in to headquartersin Little Rock, Arkansas. The firm's averageaccounts receivable (A/R) is $2.5 million and isfinanced by a bank loan with 11 percent annualinterest. Cross is considering a regional lockboxsystem to speed up collections which it believes willreduce A/R by 20 percent. The annual cost of thesystem is $15,000. What is the estimated netannual savings to the firm from implementing thelockbox system?a. $500,000b. $30,000c. $60,000d. $55,000e. $40,000

To calculate the estimated net annual savings for Cross Collectibles from implementing the lockbox…

Answered: Cross Collectibles currently fills mail…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 5P

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