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Homework answers / question archive / If a lock box system that is able to collect 200 cheques per day that average $700 each can reduce processing time by 3 days, what are the annual expected savings if the annual interest rate is 4%? $5,600 $420,000 $16,800 $168,000
If a lock box system that is able to collect 200 cheques per day that average $700 each can reduce processing time by 3 days, what are the annual expected savings if the annual interest rate is 4%?
$5,600
$420,000
$16,800
$168,000
Computation of the annual savings:-
Annual savings = Average collections * Time saved * Annual interest rate
= 200 * $700 * 3 * 4%
= $16,800
Correct option is 3). $16,800
