What is the npv of accepting the lockbox agreement

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Your firm has an average receipt size of $175. A bank has approached you concerning a lockbox service that will decrease your total collection time by one day. You typically receive 5,900 checks per day. The daily interest rate is 0.016 percent. The bank charges a lockbox fee of $125 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: EM13336323

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