1. Katniss Everdeen is the credit and loans manager for Panem Corp and has given you the following information to help her decide if Panem should use a lockbox system or not.

Current payments forecasted: 600 payments per day

Average Payment size: $1,200

The bank's charge for the lockbox: $0.19 per cheque

Currently, the Panem receives these cheques directly and then deposits them into the bank themselves. Customers are happy with this setup and usually pay within the discount period. Based on this, Katniss believes that there will be a 1% decrease in payments sent to the lockbox, with customers taking the option to send their payments directly to Panem Corp instead. Katniss doesn't believe that this will be a problem.

Required:

Should Panem Corp use a lockbox? Show all calculations to support your answer.

Answer rating: 100% (QA)

To determine whether Panem Corp should use a lockbox system we need to calculate the costs and benefits of using a lockbox system compared to the curr... View the full answer