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Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day 4
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following:
Average number of payments per day
Average value of payment $
Variable lockbox fee per transaction $
Daily interest rate on money market securities
The total collection time will be reduced by three days if the lockbox system is adopted.
a What is the PV of adopting the system? Do not round intermediate calculations.
b What is the NPV of adopting the system? Do not round intermediate calculations and round your answer to the nearest whole number, eg
c What is the net cash flow per day from adopting the lockbox system? Per check? Do not round intermediate calculations and round your answers to decimal places, eg
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