Your firm has an average receipt size of $175. A bank has approached you concerning a lockbox service that will decrease your total collection time by one day days. You typically receive 6,500 cheques per day. The daily interest rate is 0.017 percent. The bank charges a lockbox fee of $160 per day.

a-1). What is the NPV of accepting the lockbox agreement? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV $

a-2). Should the lockbox project be accepted? multiple choice Yes No

b). What would the net annual savings be if the service were adopted? (Use 365 days a year. Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

Net annual savings $ _______