Question: A company is considering implementing a lockbox system. There is an annual fee of $6,830 plus a transaction fee of $0.05 per payment. The average

A company is considering implementing a lockbox system. There is an

A company is considering implementing a lockbox system. There is an annual fee of $6,830 plus a transaction fee of $0.05 per payment. The average size of customer payments is $3,285, and there are 33 payments made daily on average. The company can earn an EAR of 3.27% on its cash balances. For the lockbox system to be adopted with a positive NPV, by how many days should the average collection time be reduced at a minimum? Fractional answers are OK. (Assume 365 days in a year.) 1.94 1.99 2.05 2.10 2.15

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

A company estimates that it can sell $47,050 worth of goods in the month of April. The account receivable balance at beginning of the month is $1,566. Average collection period is 19 days. Assuming a...

A company is considering implementing a lockbox system. There is an annual fee of $5,400 plus a transaction fee of $0.05 per payment. The average size of customer payments is $2,680, and there are 22...

20. A company is considering implementing a lockbox system. There is an annual fee of $6,050 plus a transaction fee of $0.05 per payment. The average size of customer payments is $2,955, and there...

A company is considering implementing a lockbox system. There is an annual fee of $6,050 plus a transaction fee of $0.05 per payment. The average size of customer payments is $2,955, and there are 27...

A company is considering implementing a lockbox system. There is an annual fee of $5,270 plus a transaction fee of $0.05 per payment. The average size of customer payments is $2,625, and there are 21...

Question 23 (1 point) A company is considering implementing a lockbox system. There is an annual fee of $7,220 plus a transaction fee of $0.05 per payment. The average size of customer payments is...

Question 1 (1 point) A company is considering implementing a lockbox system. There is an annual fee of $6,700 plus a transaction fee of $0.05 per payment. The average size of customer payments is...

A company is considering implementing a lockbox system. There is an annual fee of $5,660 plus a transaction fee of $0.05 per payment. The average size of customer payments is $2,790, and there are 24...

A company is considering implementing a lockbox system. There is an annual fee of $5,530 plus a transaction fee of $0.05 per payment. The average size of customer payments is $2,735, and there are 23...

thank you A company is considering implementing a lockbox system. There is an annual fee of $6,570 plus a transaction fee of $0.05 per payment. The average size of customer payments is $3,175, and...

Internal economies of scale arise when the cost per unit Select one: O a. rises as the industry grows larger. O b. falls as the industry grows larger. O c. falls as the average firm grows larger. O...

According to IATA, "The COVID-19 crisis has disrupted global air travel resulting in a dramatic decrease in the consumption of jet fuel by airlines. Coupled with this decline was a deep and rapid...

What potential does your company have to add value to its products or lower the costs of value creation by expanding internationally?

Discuss several ways ( at least four ways ) to improve the requirement process and thus, a project team can avoid a situation where too many changes to the project requirements occur at the later...

Jayson has identified that he will need buy-in to create and launch Calicos career planning initiative. Identify some stages that will have to take place in the development of the career planning...

Do you agree with the results/recommendations?

If employees are properly selected, there should be no need for an orientation program or training. Do you agree or disagree? Why?