Linkup Systems, which provides investors with computerized information about stock prices, is considering the establishment of a lockbox system with...

Linkup Systems, which provides investors with computerized information about stock prices, is considering the establishment of a lockbox system with its bank. The firm receives daily collections of $20 million, and could earn 6% on any funds freed up through faster collections. If the lockbox system can save 2 days in the collection process, and the firm's bankers will charge $200,000 per year to operate the lockbox system, is it worth it to establish the system?

SOLUTION:Average payment received per day $20,000,000.00 Number of days saved to get money 2.00 Return on marketable securities 6% ReturnLess: Operating Expense $2,400,000.00$200,000.00 Net...