Global Manufacturing. Inc. is considering using a lockbox system to speed up collections from its customers. They have two proposals to consider: one from U.S. Bank, and one from Wells Fargo Bank to provide a lockbox service. The basic information about each bank's proposal is presented in the table below.

	U. S. Bank	Wells Fargo
Rate on money market investments	3.14%	3.14%
Average Customer payment	$1,670	$1,670
Average number of payments per day	118	118
Annual fee	$12,800	$4,500
Cost / transaction	$0.05	$0.12
Reduction in collection time	5	3

REQUIRED:

1. What is the Net Present Value (NPV) of each of the new lockbox system proposals? (Round to the nearest whole dollar)

NPV of U.S. Bank Lockbox	$
NPV of Wells Fargo Lockbox	$

2. How many customers are needed, on average each day, to make each of the lockbox systems break-even? (Round to the nearest whole customer)

# Customers required for U.S. Bank Lockbox	customers
# Customers required for Wells Fargo Lockbox	customers

3. Which is the Preferred Lockbox System for Global Manufacturing, Inc.? (U.S. Bank or Wells Fargo)

(Click to select) U.S. Bank Wells Fargo Neither Lockbox is Acceptable

4. How much of a reduction in accounts receivable should Global expect from the Preferred Lockbox System if implemented in 2020? (Round to the nearest whole dollar)

Reduction in A/R balance

$