Bird's Eye Treehouses, Incorporated, a Kentucky company, has determined that a

majority of its customers are located in the Pennsylvania area. Therefore, it is

considering using a lockbox system offered by a bank located in Pittsburgh. The bank

has estimated that use of the system will reduce collection time by $1\mathrm{.}5$ days.

Average number of payments per day

Average value of payment

Variable lockbox fee $($per transaction$)$

Effective annual rate on money market

securities

$825$ $$745$ $$\mathrm{.}155\mathrm{.}5\%$

The total collection time will be reduced by three days if the lockbox system is adopted.

a$.$ What is the NPV of the new lockbox system? $($Do not round intermediate calculations

and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ Suppose in addition to the variable charge, there is an annual fixed charge of $$5,000$

to be paid at the end of each year. What is the NPV now? $($A negative answer should

be indicated by a minus sign. Do not round intermediate calculations and round

your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$