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Can't figure out the net annual savings Your firm has an average receipt size of $130. A bank has approached you concerning a lockbox service
Can't figure out the net annual savings
Your firm has an average receipt size of $130. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 6,600 checks per day. The daily interest rate is .018 percent. The bank charges a lockbox fee of $185 per day. What is the NPV of accepting the lockbox agreement? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $| 688222.22 What would the net annual savings be if the service were adopted? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Step by Step Solution
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