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Your firm has an average receipt size of $95. A bank has approached you concerning a lockbox service that will decrease your total collection time
Your firm has an average receipt size of $95. A bank has approached you concerning a lockbox service that will decrease your total collection time by 3 days. You typically receive 8,600 checks per day. The daily interest rate is 0.015 percent. |
If the bank charges a fee of $200 per day, what is the NPV of the lockbox project? |
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What would the net annual savings be if the service were adopted? |
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