FastBucks Inc

FastBucks Inc.has offered to set up a concentration banking system that will save three days of mail float and one day of presentation float.Your receivables average $20,000 per day and the opportunity cost of funds is 6 percent.How much would you be willing to pay FastBucks annually to administer the system perpetually?

A) $2,400
B) $4,800
C) $40,000
D) $80,000 present value of reduced float = 4 days @ $20,000
= $80,000
(see answer to Question 50 for valuation)
Thus, what annuity has a present value of $40,000 when discounted at 6 percent?
$80,000 = annuity/.06