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Your firm has an average receipt size of $125. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 6,400 checks per day. The daily interest rate is 0.016 percent. The bank charges a lockbox fee of $175 per day.

What is the NPV of accepting the lockbox agreement?

What would the net annual savings be if the service were adopted? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92859973

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