Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day 485
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: |
Average number of payments per day | 485 | ||
Average value of payment | $ | 935 | |
Variable lockbox fee (per transaction) | $ | .15 | |
Daily interest rate on money market securities | .068 | % | |
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 and round your answer to the nearest whole number, e.g., 32.) |
b. | What is the NPV of adopting the system? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
c. | What is the net cash flow per day from adopting? Per check? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started