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Using an annual opportunity cost of funds (l) of 5% and the information below, which bank should the firm choose for lockbox service? k Total
Using an annual opportunity cost of funds (l) of 5% and the information below, which bank should the firm choose for lockbox service? k Total Cost = N 365 x[p*D*(3*) + vc]+ FC Bank A Bank B Firm Data 4,500 $30,000 Assumptions Average No. Remittances (N) Average Face Value (F) Float Variable Cost (VC) Fixed Cost (FC) 3 4 $0.20 $300 $0.50 $400 Bank A Bank B
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