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ABC Co is thinking of installing a lockbox system in Toronto to collect payments from the Western Provinces. The collection time is currently five days

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ABC Co is thinking of installing a lockbox system in Toronto to collect payments from the Western Provinces. The collection time is currently five days and would be reduced to three days if the system is installed. Daily interest on T-bills is 0.015%. The average number of daily payments is 650 and the average cheque size is $250. If the bank charges 6 per cheque, should ABC Co get the lockbox? ABC would be indifferent as the NPV is $0 No, because the NPV is -$97,500. Yes, because the NPV is $62,500. Yes, because the NPV is $97,500. No, because the NPV is - $62,500

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