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Murkywater Company is considering a lockbox system Its collection delay is currently 12 days. Reduction in mailing time 1.5 day Reduction in clearing time 1.5 day Reduction in firm processing

Murkywater Company is considering a lockbox system. Its collection delay is currently 12 days.

  • Reduction in mailing time = 1.5 day
  • Reduction in clearing time = 1.5 day
  • Reduction in firm processing time = 1.0 day
  • Total = 4.0 days

The following is also known:

  • Daily interest on Treasury bills = 0.025%
  • Average number of daily payments to lockboxes = 4,000
  • Average size of payment = $400

A local bank has agreed to operate this lockbox system for a fee of $0.25 per check processed. What is the Value of the proposal?

Multiple Choice

  • $2,400,000

  • $3,400,000

  • $4,400,000

  • $5,400,000

  • $6,400,000

The quickest, most expensive way to make funds available is by using a:

Multiple Choice

  • Depository transfer check (DTC)

  • Cash concentration system

  • Cash collection point

  • Automated clearinghouse (ACH)

  • Wire transfer

Aug 16 2020 View more View Less

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