Cross Collectibles currently fills mail orders from all over the U.S.and receipts come in to headquarters in Little Rock,Arkansas.The firm's average accounts receivable (A/R)is $2.5 million and is financed by an 11 percent annual,simple interest bank loan.Cross is considering a regional lockbox system to speed up collections which it believes will reduce A/R by 20 percent.The annual cost of the system is $15,000.What is the estimated net annual savings to the firm from implementing the lockbox system?
A) $500,000
B) $30,000
C) $60,000
D) $55,000
E) $40,000

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The Answer of Cross Collectibles currently fills mail orders from all over the U.S.and receipts come in to headquarters in Little Rock,Arkansas.The firm's average accounts receivable (A/R)is $2.5 million and is financed by an 11 percent annual,simple interest bank loan.Cross is considering a regional lockbox system to speed up collections which it believes will reduce A/R by 20 percent.The annual cost of the system is $15,000.What is the estimated net annual savings to the firm from implementing the lockbox system?
A) $500,000
B) $30,000
C) $60,000
D) $55,000
E) $40,000

Cross Collectibles Currently Fills Mail Orders from All Over the U.S.and