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Question 5 (10 marks) Cash Management Bird's Eye Treehouses, Inc., a Kentucky company, has determined that amaiqrjty..pt its customers are located in the Pennsylvania

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Question 5 (10 marks) Cash Management Bird's Eye Treehouses, Inc., a Kentucky company, has determined that amaiqrjty..pt 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 1.5 days. Avera e number of a ments er da Avera e value of a ment Variable lockbox fee er transaction Annual interest rate on mone market securities Required: 790 $ 740 $ 0.10 3.4% (a) What is the NPV of the new lockbox system? Without the fee, should the lockbox system be accepted? (5 marks)

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