NPV and Collection Time Your firm has an average receipt size of $117. A bank has approached

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NPV and Collection Time Your firm has an average receipt size of $117. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 6,500 checks per day. The daily interest rate is .015 percent. If the bank charges a fee of $160 per day, should the lockbox project be accepted? What would the net annual savings be if the service were adopted?

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Corporate Finance With Connect Access Card

ISBN: 978-1259672484

10th Edition

Authors: Stephen Ross ,Randolph Westerfield ,Jeffrey Jaffe

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