Problem 27-11 Lockboxes a

Problem 27-11 Lockboxes a

Problem 27-11 Lockboxes and Collection Time Bird’s Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a bank located in Pittsburgh. The bank has estimated that use of the system will reduce collection time by 2 days.Average number of payments per day 810Average value of payment $ 760Variable lockbox fee (per transaction) $ .20Annual interest rate on money market securities 5.0 %What is the NPV of the new lockbox system? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) NPVSuppose in addition to the variable charge that there is an annual fixed charge of $4,000 to be paid at the end of each year. What is the NPV now? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) NPV $

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