Mesa Bank Lock Box Services

The Mesa Bank is offering your company the use of their lockbox services. They estimate that you can reduce your average mail time by 2 days and they can save you a combined clearing and processing time of 1.5 days by putting the checks into the clearing system sooner. The firm receives 320 checks a day on average written for $2,500. The current T-Bill rate is 4% or .0107% per day. If Mesa will charge your firm an annual fee of $35,000 and .20 cents per check handled will you accept Mesa's services?

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...te is 4% or .0107% per day. If Mesa will charge your firm an annual fee of $35,000 and .20 cents per check handled will you accept Mesa's services?

Advantage of lockbox system=

Number of checks per day= 320
Average amount per check= $2,500
Amount freed up per day = $800,000 = 320 x ...