Net annual savings to firm from implementing lockbox system

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A firm's average accounts receivable (A/R) is $2.0 million and is financed by a bank loan with 12% annual interest. It is considering a regional lockbox system to speed up collections that it believes will reduce A/R by 20 percent. The annual cost of the system is $12,000. What is the estimated net annual savings to the firm from implementing the lockbox system?

Reference no: EM13924780

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