What would the net annual savings be

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Reference no: EM13265535

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 6,800 checks per day. The daily interest rate is 0.017 percent. The bank charges a lockbox fee of $170 per day.

What is the NPV of accepting the lockbox agreement?

What would the net annual savings be if the service were adopted?

Reference no: EM13265535

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