Q55
Single choice
An analyst at XYZ Company was assigned with determining if the company should start to use a lockbox provider for its retail payments. The analyst determined that the company's annual sales of $324,000,000 were recorded evenly throughout the year. The Company receives 30,000 checks annually. Total dollar-
days float without the lockbox is $76,500,000 and the annual opportunity cost is 5.5%; assume 30-day month. The industry's average opportunity cost is 6.0%.
Using the information in the table,what would be the net effect of using the lockbox?
