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Randy Rand's Inc. receives 360 cheques a day on average, and the average amount of each cheque is $4,500. Randy's is thinking about implementing a
Randy Rand's Inc. receives 360 cheques a day on average, and the average amount of each cheque is $4,500. Randy's is thinking about implementing a lockbox system that it believes will reduce the average collection time by 3 days. For this service the bank charges $.85 per cheque. The daily interest rate on Treasury bills is .0125 percent. What is the net present value of the lockbox arrangement?
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