Problem:
Firm A is considering the use of a lock-box system. The firm's average check receipt is $150. The company invests excess cash in money market and earns 8% p.a. The lock-box system will speed up collection by 2.5 days.
Required:
Question: What is the maximum per check processing cost payable by the firm?
a. $0.083
b. 0.30
c. 4.8
d. 0.03
e. 8.22
Note: Show supporting computations in good form.