Problemyou are considering implementing a lockbox system, Ask an Expert

Accounting

Problem:

You are considering implementing a lockbox system for your firm. The system is expected to reduce the average collection time by 2.8 days. On an average day, your firm receives 2,419 checks with an average value of $1,287 each. The daily interest rate on Treasury bills is 0.016 percent. The bank charge per check is $0.30.

Requirement:

Question: What is the net present value of this lockbox arrangement?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173353

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