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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
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Experience:  Post Graduate Diploma in Management (MBA)
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Eagle Industries feels that a lockbox system can shorten its

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Eagle Industries feels that a lockbox system can shorten its accounts receivable collection period by 3 days. Credit sales are $3,240,000 per year, billed on a continuous basis. The firm has other equally risky investments that earn a return of 15%. The cost of the lockbox system is $9,000 per year. (Note: Assume a 365-day year.)

a. What amount of cash will be made available for other uses under the lockbox system?

b. What net benefit (cost) will the firm realize if it adopts the lockbox system?
Should it adopt the proposed lockbox system?
Thanks for requesting me.

Please let me know your deadline.
Customer: replied 4 years ago.

Hello Linda,

This is Tony again, this is the second problem I am not understanding. I would like to have it as soon as possible. Later today or tomorrow morning would be great. I work second shift and can only study and review in the morning or early afternoon.

Thanks, Tony

I will post the solution tonight itself.
Customer: replied 4 years ago.

Again, Thank you for your expertise!


You are welcome.

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