NPV and Collection time your firm has an average receipt size of $95. A ban has approached

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NPV and Collection time your firm has an average receipt size of $95. A ban has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 9,400 checks per day. The daily interest rate is .016 percent. If the bank charges a fee of $190 per day, should the lockbox project be accepted? What would the net annual savings be if the service were adopted?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

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