Question: Question 5 (1 point) A company is considering implementing a lockbox system. If the system is implemented, the collection time will be reduced by 2

 Question 5 (1 point) A company is considering implementing a lockbox

Question 5 (1 point) A company is considering implementing a lockbox system. If the system is implemented, the collection time will be reduced by 2 days. The average number of payments per day is 885, with an average payment value of $1,103. The lockbox charges a fee per transaction. (That is, the more the number of transactions, the more the total fees.) Assume the company can earn a 2.48% EAR on its cash balances and that there are 365 days in a year. What is the maximum transaction fee the company can pay and still be able to adopt the project with a positive NPV? $0.148 $0.152 $0.155 $0.159 $0.163

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!