Motors Company has a majority of its customers located in the Central Visayas and Mindanao. Stone Commercial Bank has agreed to provide a lockbox system to Motors Company at a fixed fee of P50,000 per year and a variable fee of P.50 for each payment processed by the bank. On average, Motors Company receives 50 payments per day, each averaging P20,000. With the lockbox system, the company's collection float will decrease by 2 days. The annual interest rate on money market securities is 6%. If Motors makes use of the lockbox system, what would be the net benefit to the company? Use 365 days per year.

A. 51,750

B. 60,875

C. 111,750

D. 120,875

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Answer C 111750 To find the net benefit ... View the full answer