Question
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day 350
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day 350 Average value of payment $ 940 Variable lockbox fee (per transaction) $ .40 Daily interest rate on money market securities .068 % The total collection time will be reduced by four 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 dollar amount, e.g., 32.) PV $ b. What is the NPV of adopting the system? (Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.) NPV $ 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.) Net cash flow $ per day Net cash flow $ per check
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