What will the firms savings be from using the lockbox

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Reference no: EM131445342

Jennifer Electrical is evaluating whether a lockbox it is currently using is worth keeping. Management estimates that the lockbox reduces the mail float by 2.4 days and the processing by half a day. The remittances average $35,496 a day for Jennifer Electrical, with the average check being for $500. The bank charges $0.34 per processed check. Assume that there are 270 business days in a year and that the firm’s opportunity cost for these funds is 7.98 percent, What will the firm’s savings be from using the lockbox? (Round answer to 2 decimal places, e.g. 15.25.)

Reference no: EM131445342

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