Question
Your firm has an average receipt size of $125. A bank has approached you concerning a lockbox service that will decrease your total collection time
Your firm has an average receipt size of $125. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 5,800 checks per day. The daily interest rate is .017 percent. The bank charges a lockbox fee of $170 per day. What is the NPV of accepting the lockbox agreement? (
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
11th Edition
0321357965, 978-0321357960
