QUESTION 10

The Williams Company can convert to ACH disbursing for $20,000. Williams is expected to average a perpetual 5,000 checks per year. If ACH disbursing will save Williams 20 cents per payment, what is the NPV of the decision to convert to ACH? Assume a discount rate of 10%.

	a.	-$10,000
	b.	$4,000
	c.	-$8,000
	d.	$10,000

2 points

QUESTION 11

Following Question 10, what is the minimum number of annual payments required to justify the cost to convert to ACH disbursing?

	a.	5,000
	b.	833
	c.	100,000
	d.	10,000

2 points

QUESTION 12

Following Question 10, what is the maximum opportunity cost at which the decision to switch is still manageable?

	a.	15%
	b.	10%
	c.	20%
	d.	5%