Assume the following facts about a firm:
Would a lock box system that reduces check clearing time from six to three days be justified?
A)Yes, because it would save more than $1,800 annually.
B)No, because it would cost $2,100 annually.
C)Yes, because of the additional convenience of a shorter clearing time.
D)Indifferent, the cost and expense are about the same.

Question

Assume the following facts about a firm:
 Would a lock box system that reduces check clearing time from six to three days be justified?
A)Yes, because it would save more than $1,800 annually. 
B)No, because it would cost $2,100 annually. 
C)Yes, because of the additional convenience of a shorter clearing time. 
D)Indifferent, the cost and expense are about the same.

Quizplus · Accepted Answer

The lock box system would save more than $1,800 annually, which justifies the cost of the system.

Assume the Following Facts About a Firm