Value of Lockboxes University Housing Rentals, located in a remote area of Montana, still has many of its renters paying by paper check, many of which are written by parents

originating from all over the country. Rent is due the $1$st of each month, but if postmarked by

the $1$st$,$ no late fees are assessed, which is industry practice. The time it takes for checks to arrive to University Housing Rentals is lengthy, in fact up to $14$ days, due to its remote location and less frequent US Postal service pickups and deliveries. It plans to transition to fully electronic payment in $5$ years, after it replaces its aging systems and processes. But, there is an opportunity now being offered by its bank to adopt a lockbox payment system based in LA that will reduce its collection time by an estimated $5$ days for these paper checks. What is the NPV of adopting the system if into perpetuity and $?$the following

Ave. # payments per day

Ave. $ per payment

Variable lockbox fee per payment Daily Interest Rate

$500$ $$5,500$ $$1\mathrm{.}000\mathrm{.}020\%$