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Question
Flashbinder Guitars, Inc. is negotiating with the bank for a lockbox system that is expected to reduce check collection time by 4 days. Flashbinder Guitars' average check size is $1,200 and any funds freed up by the new system will be invested in a money-market account that is currently paying 2.5% annually. What is the most Flashbinder Guitars should be willing to pay the bank for the lockbox service, assuming the bank charges a per-check processing fee?A) 20.500 cents
B) 29.767 cents
C) 30.726 cents
D) 32.877 cents
Answer
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