Bird's Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located...

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Bird's Eye Treehouses,Inc., a Kentucky company, has determined that a majority of itscustomers are located in the Pennsylvania area. It therefore isconsidering using a lockbox system offered by a bank located inPittsburgh. The bank has estimated that use of the system willreduce collection time by 2 days.

  Average number of payments per day 780
  Average value of payment $ 730
  Variable lockbox fee (per transaction) $ .15
  Annual interest rate on money market securities 4.2 %
What is the NPV of thenew lockbox system? (Do not round intermediate calculationsand round your answer to 2 decimal places, e.g.,32.16.)

  NPV $
Suppose in addition tothe variable charge that there is an annual fixed charge of $5,000to be paid at the end of each year. What is the NPV now? (Anegative answer should be indicated by a minus sign. Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
  NPV $

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Bird's Eye Treehouses,Inc., a Kentucky company, has determined that a majority of itscustomers are located in the Pennsylvania area. It therefore isconsidering using a lockbox system offered by a bank located inPittsburgh. The bank has estimated that use of the system willreduce collection time by 2 days. Average number of payments per day780 Average value of payment$730 Variable lockbox fee (per transaction)$.15 Annual interest rate on money market securities4.2%What is the NPV of thenew lockbox system? (Do not round intermediate calculationsand round your answer to 2 decimal places, e.g.,32.16.) NPV$Suppose in addition tothe variable charge that there is an annual fixed charge of $5,000to be paid at the end of each year. What is the NPV now? (Anegative answer should be indicated by a minus sign. Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.) NPV$


Average number of payments per day		780
Average value of payment	$	730
Variable lockbox fee (per transaction)	$	.15
Annual interest rate on money market securities		4.2	%