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Roger's Distributors receives an average of 216 checks a day

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Question

Roger's Distributors receives an average of 216 checks a day. The average amount per check is $629. The firm is considering a lockbox system which it anticipates will reduce the average collection time by 1.5 days. The daily interest rate on Treasury bills is 0.011% (not 1.1%). What is the amount of the expected daily savings of the lockbox system?

 

Paper#33855 | Written in 18-Jul-2015

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