Your firm has an average receipt size of $125. A bank has approached you concern
ID: 2719994 • Letter: Y
Question
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 7,000 checks per day. The daily interest rate is .016 percent. The bank charges a lockbox fee of $175 per day.
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 answer to 2 decimal places, e.g., 32.16.) ( I need help with this one and how to solve please)
What is the NPV of accepting the lockbox agreement? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Explanation / Answer
Your firm has an average receipt size of $125. A bank has approached you concern
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