Your firm has an average receipt size of $145. A bank has approached you converning a lockbox service that will decrease your total collection time by one day. You typically receive 6,100 checks per day. The daily interest rate is 0.017 percent. The bank charges a lockbox fee of $115 per day. 1. What is the NPV of accepting the lockbox agreement? (round answer to 2 decimal places e.g. 32.16) NPV= $? 2. 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 final answer to 2 decimal places e.g. 32.16) Net annual savings= $? Please show all work and clearly lable the answers as follows: NPV= $? and Net annual savings= $? Thanks
Finance NPV- Net annual Savings
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Dec 18, 2020EXPERT
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