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 2 days. You typically receive 9,100 checks per day. The daily interest rate is 0.019 percent. If the bank charges a fee of $200 per day, what is the NPV of the lockbox project? NPV____ What would the net annual savings be if the service were adopted? Net annual savings___
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 2 days. You typically receive 9,100 checks per day. The daily interest rate is 0.019 percent. If the bank charges a fee of $200 per day, what is the NPV of the lockbox project? NPV____ What would the net annual savings be if the service were adopted? Net annual savings___
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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 2 days. You typically receive 9,100 checks per day. The daily interest rate is 0.019 percent.
If the bank charges a fee of $200 per day, what is the NPV of the lockbox project?
NPV____
What would the net annual savings be if the service were adopted?
Net annual savings___
Transcribed Image Text: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 2 days. You typically
receive 9,100 checks per day. The daily interest rate is 0.019 percent.
If the bank charges a fee of $200 per day, what is the NPV of the lockbox project?
NPV
What would the net annual savings be if the service were adopted?
Net annual savings
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