Question: Carter & Carter is considering setting up a regional lockbox system to speed up collections. The company sells to customers all over the U.S., and

Carter & Carter is considering setting up a regional lockbox system

Carter & Carter is considering setting up a regional lockbox system to speed up collections. The company sells to customers all over the U.S., and all receipts come in to its headquarters in San Francisco The firm's average accounts receivable balance is $2.5 million, and hey are financed by a bank loan at an 11% annual interest rate. T he firm believes this new lockbox system would reduce receivables by 20%. If the annual cost of the systern is $15,000, what pre-tax net annual savings would be realized? a, $44,000 b. $36,000 Oc. $29,160 d.$40,000 e. $32,400

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Carter & Carter is considering setting up a regional lockbox system to speed up collections. The company sells to customers all over the U.S., and all receipts come in to its headquarters in San...

Finance Management Question, Topics include: Nominal Annual Percentage, Cash Conversion Cycle, Cash Receipts, NPV Lease Analysis. The excel file has 5 tabs that need to be completed, please show all...

12 10 Whitmer Inc. sells to customers all over the U.S., and all receipts come in to its headquarters in New York City. The firm's average accounts receivable balance is $2.5 million, and they are...

44. Nogueiras Corps budgeted monthly sales are $7,000, and they are constant from month to month. 40% of its customers pay in the first month and take the 2% discount, while the remaining 60% pay in...

Whitmer Inc. sells to customers all over the U . S . , and all receipts come in to its headquarters in New York City. The firm's average accounts receivable balance is $ 2 . 5 million, and they are...

Sunny Sports, Inc. is a retailer of outdoor sporting goods. It sells to customers all over the U . S . and Canada and all receipts come in to its headquarters in Las Vegas. The firm's average...

Whitmer Inc. sells to customers all over the U.S., and all receipts come in to its headquarters in New York City. The firm's average accounts receivable balance is $2.5 million, and they are financed...

Sunny Sports, Inc. is a retailer of outdoor sporting goods. It sells to customers all over the U.S. and Canada and all receipts come in to its headquarters in Las Vegas. The firm's average accounts...

Sunny Sports, Inc. is a retailer of outdoor sporting goods. It sells to customers all over the U.S. and Canada, and all receipts come in to its headquarters in Las Vegas. The firm's average accounts...

Suppose you used Minitab to fit the model y = Î²0 + Î²1x1 + Î²2x2 + Îµ to n = 15 data points and obtained the printout shown below. a. What is the least...

Techno Max Company is an automobile spare parts company which produces Brake shoes and Brake Drum. For the year 2019 following information is provided, Brake Shoe Brake Drum Selling price per unit...

A bond that was issued one year ago and has 8 more years until maturity, a yield to maturity ( YTM ) of 1 0 . 0 0 % , and a price of $ 9 3 4 . 6 9 . The bond s par value of $ 1 , 0 0 0 is returned at...

Consider the two strings A = "computer", B = "intro". With the given string functions, write the string values to the spaces provided. Output lines should be considered independently. Output: a)...

All perceived probabilities are weighted lower than actual probabilities.

Risk-averse individuals have a concave value function for prospective gains and a convex value function for prospective losses.

Whether a prospect is coded as a gain or as a loss can depend on how that prospect is framed.