Problem 27-5 NPV and Collection Time Your firm has an average receipt size of $130. A bank has approached you concerning lockbox service that will decrease your total collection time by two days. You typical receive 6,600 checks per day. The daily interest rate is .018 percent. The bank charges lockbox fee of $185 per day. a. What is the NPV of accepting the lockbox agreement? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. 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 answer to 2 decimal places, e.g., 32.16.) a. NPV b. Net annual savings

Problem 27-5 NPV and Collection Time Your firm has an average receipt size of $130. A bank has approached you concerning lockbox service that will decrease your total collection time by two days. You typical receive 6,600 checks per day. The daily interest rate is .018 percent. The bank charges lockbox fee of $185 per day. a. What is the NPV of accepting the lockbox agreement? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. 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 answer to 2 decimal places, e.g., 32.16.) a. NPV b. Net annual savings

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter6: Using Credit

Section: Chapter Questions

Problem 9FPE

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You have an inactive credit card with $1100 outstanding unpaid balance. The credit card charges at an annual rate of 16.5% compounded monthly. You are able to make a payment of $300 one month from today and $500 two months from today Find the amount that you will have to pay three months from today to completely pay off the credit card debt. A. 5.165.41 B.$413.53 C.S.264.66 D. $ 330.82 E.$ 180.04
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