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5. The firm's average accounts receivable is $1,000,000 and is financed by a 7% annual interest bank loan. The firm is considering a regional lockbox

5. The firm's average accounts receivable is $1,000,000 and is financed by a 7% annual interest bank loan. The firm is considering a regional lockbox system which it believes will reduce Accounts Receivable by 20 percent. The annual cost of the system is $20,000. What is the estimated net annual savings to the firm from implementing the lockbox system and should the firm use the system?

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