SteelCo Production, Inc is considering the use of a lock-box collection system. SteelCo's average

check receipt is $1,350. The company invests excess cash in money-market certificates and receives
an average of 3.5% annual interest.

The lock-box system will speed up SteelCo's collections by 2.5
days. What is the maximum per check processing cost that SteelCo should be willing to pay for the
lock-box system?
A) $0.4519 B) $0.2987 C) $0.3236 D) $0.1871


C

Business

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