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NPV and Collection Time Your firm has an average receipt size of $127. A bank has approached you concerning a lockbox service that will decrease
NPV and Collection Time Your firm has an average receipt size of $127. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 4,950 checks per day. The daily interest rate is 0.015 percent. If the bank charges a fee of $155 per day, should the lockbox project be accepted? What would the net annual savings be if the service were adopted?
Do not round intermediate calculations and shows all the formula and step.
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