Blue Ridge Industrial Supply receives an average of 89 cheques a day. The average amount per cheque is $6,250. The firm is considering a lockbox system which it anticipates will reduce the average collection time by 3.5 days. The bank charges $.22 a cheque for this service. The daily interest rate on Treasury bills is.011 %. What is the average daily cost of the lockbox system?
A) $19.58
B) $19.80
C) $20.16
D) $21.42
E) $22.22
Correct Answer:
Verified
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