Solved by Expert Tutors
Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system.
Solved by Expert Tutors
Question

Anne Teak, the financial manager of a furniture manufacturer, is considering

operating a lock-box system. She forecasts that 450 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 intermediate calculations.)
 






 
b. Is it worthwhile to adopt the system?
 



-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.)
 

Step-by-step answer

The student who asked this found it Helpful

ctum vitae odi

inia pulvinar tortor n


icitur laore

consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet


facilisis. P

a molestie consequat, ultrices ac mag

acinia pulvi

ce dui lectus,

, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet,

ec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie con

facilisis. Pellentesque dapibus efficitu

iscing elit. Nam lacinia pulvinar tortor

amet, consectetur adipiscing elit. N

s ante, dapibus a molestie

ce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lore

inia pulvinar tortor ne

, consectetur adipi

dictum vitae odio. Donec alique

inia pulvinar tortor n


icitur laore

consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet


facilisis. P

amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pelle

a molestie consequat, ultrices ac

Donec aliquet. Lore

ongue vel laoreet ac

molestie consequa

a molestie consequat, ultrices ac mag

Subscribe to view the full answer

Subject: Business, Finance

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Let our 24/7 Finance tutors help you get unstuck! Ask your first question.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes