The Baker Co. receives an average of 230 cheques a day. The average amount per cheque is $1,150. The firm is considering a lockbox system which it anticipates will reduce the average collection time by 3 days. The bank charges $.25 a cheque for this service. The daily interest rate on Treasury bills is.008 %. What is the average daily cost of the lockbox system?
A) $57.50
B) $63.48
C) $77.78
D) $115.00
E) $172.50
Correct Answer:
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