Your firm has an average receipt size of $135. A bank has approached you concerning a lockbox

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Your firm has an average receipt size of $135. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 4,900 checks per day. The daily interest rate is .016 percent. If the bank charges a fee of $185 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: 9781265553609

13th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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