The Davis Manufacturing Company will collect an estimated $12,000,000 next year; and it will receive an estimated 20,000 checks.Davis' bank has offered to set up a lock-box system that will reduce float time by 4.5 days.The cost of the system will be $ .15 per check.What is the minimum annual interest rate on its cash balance that Davis should receive before it would be willing to adopt the lock-box system?
A) 3.25%
B) 2.03%
C) 1.82%
D) 1.07%

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The Answer of The Davis Manufacturing Company will collect an estimated $12,000,000 next year; and it will receive an estimated 20,000 checks.Davis' bank has offered to set up a lock-box system that will reduce float time by 4.5 days.The cost of the system will be $ .15 per check.What is the minimum annual interest rate on its cash balance that Davis should receive before it would be willing to adopt the lock-box system?
A) 3.25%
B) 2.03%
C) 1.82%
D) 1.07%

The Davis Manufacturing Company Will Collect an Estimated $12,000,000 Next