Your firm has an average receipt size of $117. A bank has approached you concerning a lockbox
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Your firm has an average receipt size of $117. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 6,500 checks per day. The daily interest rate is .015 percent. If the bank charges a fee of $160 per day, should the lockbox project be accepted? What would the net annual savings be if the service were adopted?
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The average daily collections are the number of checks received times the average value of a check s...View the full answer
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Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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