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Question
Assume that Federated Stores, whose credit card billings total $120 billion per year, were to implement a lockbox arrangement that would speed up the collection of its credit card billings by 2 full days. If Federated could earn 3.5% on its marketable securities, how much would the firm earn per year from such a lockbox arrangement? Assume a 365-day year.A) $316.99 million
B) $244.58 million
C) $230.14 million
D) $183.50 million
Answer
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