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If a firm has an average daily, remittance of $4,000,000 and 1.5 days in the collection process may be saved through a lockbox system, has the firm freed up any real funds for other investment?

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If a firm has an average daily, remittance of $4,000,000 and 1.5 days in the collection process may be saved through a lockbox system, has the firm freed up any real funds for other investment?

 Options:

A. No, these funds are theoretical in nature only
B. Yes, approximately $2,666,667 has been freed up
C. Yes, approximately $6,000,000 has been freed up
D. Cannot be determined from information provided

 

The Correct Answer Is:

  • C. Yes, approximately $6,000,000 has been freed up

 

Conclusion

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