The company you work for is evaluating a proposal by your bank for services to reduce float time. Your company current float time is 3 days. On average the checks processed per day is 1,000 and the average value of each check is $400. The opportunity cost per day is .01%. The bank proposes 4 lockboxes in strategic locations. The fee for the service is composed of two parts, the per check fee processed and the end of day wire transfer to your primary bank. The per check fee is $0.13 and end of day transfer fee is $25.

A. How much is the one-time benefit from this proposal?

B. How much is the present value of the bank fees?

C. How much is the net present value of the proposal?

D. If the wire transfer fee were $30 how much would the NPV for the proposal be?