Essay
Fast Delivery Service has received a proposal from its bank to establish a lock-box system to accelerate the receipt of $600 million annually on 900,000 checks.By its own analysis Fast Delivery believes such a system would decrease total float by 3.5 days.If Fast Delivery Service can earn 7 percent before taxes on the released funds,what is the maximum that Fast Delivery Service should be willing to pay the bank per check for the service?
Use a 365-day year.
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P = (3.5)($600 milli...View Answer
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