If Sexy Inc. makes use of the lockbox system, what would be the net benefit to the company? Use 365 days in a year.
If Sexy Inc. makes use of the lockbox system, what would be the net benefit to the company? Use 365 days in a year.
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 14P
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MTR bank has agreed to provide a lockbox system to Sexy Inc. for a fixed fee of P50, 000 per year and a rate of P.50 for each payment processed by the bank. On average, Sexy Inc. receives 50 payments per day, each averaging P20,000. With the lockbox system, the company’s collection float will decrease by two days. The annual interest rate on
A. P50,000
B. P59,125
C. P60,875
D. P120,000
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