Question: Suppose the average daily float is $ 6 million with a weighted average delay of 5 days. a . What is the total amount unavailable

Suppose the average daily float is $6 million with a weighted average delay of 5 days.
a. What is the total amount unavailable to earn interest?
b. What is the NPV of a project that could reduce the delay by 4 days if the cost is $20 million?
4. A proposed single lockbox system will reduce collection time 3 days on average.
Daily interest rate on T-bills =0.01%.
Average number of daily payments to the lockbox is 4,000.
Average size of payment is $500.
The processing fee is $0.12 per check plus $10 to wire funds each day.
What is the maximum investment that would make this lockbox system acceptable?

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