Invention, Inc. receives an average of 250 checks a day. The average amount per check is $450. The firm is considering a lockbox system which it anticipates will reduce the average collection time by 3 days. The bank charges $.15 a check for this service. The daily interest rate on Treasury bills is.01 %. What is the net present value of this lockbox arrangement?
A) -$37,500.00
B) $506.25
C) $1,125.00
D) $112,500.00
E) $300,000.00
Correct Answer:
Verified
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