1. Invention, Inc. receives an average of 250 checks a day. The average amount per check is $400. The firm is considering a lockbox system which it anticipates will reduce the average collection time by 3 days. The bank charges $0.125 a check for this service. The daily interest rate on Treasury bills is 0.01%. What is the net present value of this lockbox arrangement?

1. -$37,500
2. $25,000
3. $37,500
4. -$12,500
5. $12,500

2. You decide to raise $7.5 million in additional funding via a rights offering. One right is being granted for every share of stock currently outstanding. The offering consists of a total of 400,000 new shares. Currently, there are 2.5 million shares outstanding at a market price of $30 per share. What is the value of one right?

1. $0.98
2. $1.69
3. $1.55
4. $1.44
5. $1.15