Business
Business, 21.10.2020 16:01, taynalizcaamanoxewm0

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

Required:
A local bank has agreed to operate this lockbox system for a fee of $0.25 per check processed. What are the costs associated with the proposal?

answer
Answers: 2

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