Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

MLo, Inc. can convert its disbursements from check to ACH for an upfront investment of $5,000. Historically, MLo has 5,000 disbursements per year. If ACH

MLo, Inc. can convert its disbursements from check to ACH for an upfront investment of $5,000. Historically, MLo has 5,000 disbursements per year. If ACH transfers are $0.20 cheaper than checks, what is the NPV of switching to ACH? Assume a discount rate of 10% and that the historical disbursement volume continues in perpetuity.

Step by Step Solution

3.44 Rating (147 Votes )

There are 3 Steps involved in it

Step: 1

Heres how to calculate the Net Present Value NPV of MLo Inc switching to ACH 1 Annual Cost Sa... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance

Authors: Jonathan Berk and Peter DeMarzo

3rd edition

978-0132992473, 132992477, 978-0133097894

More Books

Students also viewed these Accounting questions