You Are Considering Implementing a Lockbox System for Your Firm

question 12

Multiple Choice

You are considering implementing a lockbox system for your firm.The system is expected to reduce the average collection time by 2.8 days.On an average day,your firm receives 2,419 checks with an average value of $1,287 each.The daily interest rate on Treasury bills is 0.016 percent.The bank charge per check is $0.30.What is the net present value of this lockbox arrangement?

• A)-$4,535,625
• B)-$2,611,575
• C)$187,419
• D)$4,181,483
• E)$13,252,733

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Definitions:

Coccyx

The small, triangular bone at the base of the spinal column, consisting of three to five fused vertebrae, commonly referred to as the tailbone.

Spinous Process

A bony projection off the posterior (back) of each vertebra, serving as a point for muscle and ligament attachment.

Spinous Process

A bony projection off the posterior (back) part of each vertebra, serving as a point for muscle and ligament attachment.

Costal Facet

A small, flat surface on a vertebra that articulates with the rib, contributing to the thoracic cage's stability.