Your firm has an average receipt size of $120. A bank has approached you concerning a...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/66496d68edfc6_16866496d683df4e.jpg)
Transcribed Image Text:
Your firm has an average receipt size of $120. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 7,400 checks per day. The daily interest rate is .017 percent. The bank charges a lockbox fee of $170 per day. a. 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.) b. 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.) a. NPV b. Net annual savings Your firm has an average receipt size of $120. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 7,400 checks per day. The daily interest rate is .017 percent. The bank charges a lockbox fee of $170 per day. a. 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.) b. 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.) a. NPV b. Net annual savings
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
What types of costs are associated with a Stance" sock vending machine located in an airport? At Cleveland Hopkins International Airport in northeastern Ohio, a vending machine that dispenses socks...
-
Find f(t) if F(s) is given by theexpression 12(s + 2) F(s)= (s 2s + 1) (s +3)
-
The comparative income statements and edited inventory footnote for Oxford Industries, Inc. for Year 3 follow. Located in Atlanta, Oxford designs, manufactures, markets, and sells consumer apparel...
-
Graph 18 vertex \(m\) Find a Hamilton cycle of low weight for the given graph in Figure 12.362, beginning at the given vertex, and using the nearest neighbor method. What is the weight of the cycle?
-
How else can Nordstrom continue to provide exceptional customer service and increase brand loyalty?
-
The following system of equations is given: 11' 1r: +_1'_.' 3 l 31" + '1'. _\\': ? q .1'_ .11\" + 11':- 0 a) Set up the system of equations in matrix form. b) Set up the system of equations in the...
-
Suppose you have a riskless security at 3% and a market portfolio with a return of 10% and a standard deviation of 18%. How should you go about investing your money so that your investment will have...
-
If you are preparing a client for a deposition, what rules for responding to deposition questions should you review with the client?
-
What type of account is Sales Discounts? What is its normal balance?
-
Should internal auditors be held responsible for establishing computer controls? Give reasons for your answer.
-
Describe five kinds of checks which help ensure accurate computer input.
-
What should each worksheet contain besides the audit information?
-
Q) Make a concise report covering all aspects of the following questions: 1.Compare Power BI Desktop and the Power BI service 2.what is Power BI Mobile ?
-
Show, if u(x, y) and v(x, y) are harmonic functions, that u + v must be a harmonic function but that uv need not be a harmonic function. Is e"e" a harmonic function?
-
When serial bonds are issued a. the bonds all come due on the same date. b. not all of the bonds come due on the same date. c. the interest is paid as a series of monthly payments. d. the lender is...
-
What is the proper accounting and reporting of bonds payable. (See pp. 482484.)
-
What are the components of the long-term liability of the balance sheet? (See pp. 480481.)
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App