Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your firm has an average receipt size of $90. A bank has approached you concerning a lockbox service that will decrease your total collection time

Your firm has an average receipt size of $90. A bank has approached you concerning a lockbox service that will decrease your total collection time by 1 day\. You typically receive 9,400 checks per day. The daily interest rate is 0.012 percent. Required: (a) If the bank charges a fee of $180 per day, calculate the NPV of the lockbox project. (Do not include the dollar sign ($). A negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) NPV $ (b) Should the lockbox project be accepted? (Click to select) (c) What would the net annual savings be if the service were adopted? (Do not include the dollar sign ($). A negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) Annual net savings $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions