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Your firm has an average receipt size of $145. A bank has approached you concerning a lockbox service that will decrease your total collection time

Your firm has an average receipt size of $145. A bank has approached you concerning a lockbox service that will decrease your total collection time by one day. You typically receive 7,100 checks per day. The daily interest rate is .017 percent. The bank charges a lockbox fee of $135 per day. What is the NPV of accepting the lockbox agreement? What would the net annual savings be if the service were adopted?

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