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QUESTION
A firm is considering paying a lockbox operator an annual fee of $7500 to reduce its collection time by 2 days. The firm can earn 6% on any funds...
A firm is considering paying a lockbox operator an annual fee of $7500 to reduce its collection time by 2 days. The firm can earn 6% on any funds freed up by float reduction. If the firm’s average daily receipts are $80,000, should the firm proceed with the lockbox plan?
