You Are Considering Implementing a Lockbox System for Your Firm

question 309

Multiple Choice

You are considering implementing a lockbox system for your firm. The system is expected to reduce the collection time by 2 days. On an average day, your firm receives 1,650 checks with an average value of $910 each. The daily interest rate on Treasury bills is.02 %. The bank charge per check would be $.35. What is the net present value of this lockbox arrangement?

• A) $115,500
• B) $212,750
• C) $300,300
• D) $525,525
• E) $600,600

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