Question
Use the information below to answer the following questions: What is the Present Value of adopting the system: Your company is investigating a lockbox
Use the information below to answer the following questions: What is the Present Value of adopting the system: Your company is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day 500 Average value of payment Variable lockbox fee (per transaction) $1200 $.75 Daily interest rate on money market securities .03% The total collection time will be reduced by three days if the lockbox system is adopted. $2.25 million $1.50 million $2.0 millon $1.00 million $1.8 million
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