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Sears is evaluating the choice between paper check disbursement and ACH disbursement. Sears would incur up-front investment costs of $40,000. Based on a perpetuity of
- Sears is evaluating the choice between paper check disbursement and ACH disbursement. Sears would incur up-front investment costs of $40,000. Based on a perpetuity of 1,000 payments per month, per-payment savings if 40 cents, annual cost of capital is assumed to be 5%.
- What is the NPV of the decision to convert to ACH?
- What is the minimum number of payments per month in order to justify the cost to convert to ACH disbursing?
- What is the NPV of the decision to convert to ACH?
- What is the minimum number of payments per month in order to justify the cost to convert to ACH disbursing?
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
