Carter & Carter is considering setting up a regional lockbox system to speed up collections. The company sells to customers all over the U. S., and all receipts come in to its headquarters in San Francisco. The firm's average accounts receivable balance is $2.5 million, and they are financed by a bank loan at an 11% annual interest rate. The firm believes this new lockbox system would reduce receivables by 20%. If the annual cost of the system is $15,000, what pre-tax net annual savings would be realized? a. $32,400 b. $29,160 c. $40,000 d. $44,000 e. $36,000

c. $40,000

Explanation:

Reduction in Account Receivables          $500,000

($2,500,000 * 20%)

* Interest rate                                               11%          

Annual saving                                             $55,000

Less: Annual cost of system                     -$15,000

Pretax Net annual savings                         $40,000

muslims control the north africa during the period of 1500 up

to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

the east for trading with asia.