The Stetson Co. receives an average of 340 checks a day. The average amount per check is $750. The ﬁrm is considering a lockbox system which it anticipates will reduce the average collection time
By 2 days. The daily interest rate on Treasury bills is .006 percent. What is the amount of the
Expected daily savings of the lockbox system?

Question

Quizplus · Accepted Answer

The expected daily savings can be calculated by multiplying the average number of checks per day (340) by the average amount per check ($750), the reduction in collection time (2 days), and the daily interest rate (0.00006). This results in a savings of $30.60 per day.