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CTP · Question #257
CTP Question #257: Real Exam Question with Answer & Explanation
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Question
- (Topic 3) 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?
Options
- ANet savings of $57,750
- BNet savings of $63,000
- CNet savings of $1,732,500
- DNet savings of $1,890,000
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