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Your firm has an average receipt size of $70. A bank has approached you concerning a lockbox service that will decrease your total collection
Your firm has an average receipt size of $70. A bank has approached you concerning a lockbox service that will decrease your total collection time by 2 days. You typically receive 9,000 checks per day. The daily interest rate is 0.016 percent. If the bank charges a fee of $190 per day, what is the NPV of the lockbox project? NPV 13 What would the net annual savings be if the service were adopted? Net annual savings
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