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What is NPV if the firm had as many as 5000 disbursements to process with the ACH disbursement system? [Assume that discount rate is 12%.]
| | a. | $16,667 |
| | b. | $57,635 |
| | c. | -$21,290 |
| | d. | -$70,650 |
U.S. BANKING INFORMATION Monthly average ledger balance at U.S. Bank Monthly average deposit float Monthly Service Charge_US Bank Earnings Credit Rate_US Bank Required Reserves Ratio 30/365 Wire Transfer Cost ACH cost $3,500,000.00 $750,000.00 $1,000.00 0.007 0.03 0.0822 $15 $0.50 9000 $25,000.00 2 2 0 N 2 INFO ON COLLECTIONS FROM CUSTOMERS Number of remittances per month Average face value of monthly remittances Mailfloat - in house processing Processing float - in house processing Availability float - in house processing Days float Per check Variable cost of in-house Processing Fixed Cost of in-house check processing Days float with lockbox alternative Per check variable cost of lockbox alternative Fixed Cost of lockbox alternative INFO ON DISBURSEMENTS TO SUPPLIERS Disbursements per year Check cost per check 0.4 $2,500.00 4 0.8 $3,000.00 3500 $1.50 1 2 3 4 6 7 8 9 10 11 120 130 140 15 16 Disoursements per year 3500 $1.50 $0.50 Check cost_per check ACH costs_per check upfront cost to switch fully to ACH system DAILY NET CASH FLOWS (10 days into November) Day $25,000 Net Cash Flow 1 18000 2 20000 3 23000 4 25000 26000 5 6 6 35000 7 32000 8 25000 9 26000 27000 $500,000.00 0.7 0.3 0.75 10 MONTHLY SALES FORECASTS INFORMATION October sales % of sales collected in month of sale % of sales collected in following month % of sales in Cost of goods sold Monthly lease payment Cash position end of October Target cash balance Sales forecast for November Sales forecast for December MISCELLANEOUS INFO Company's Discount Rate $125,000.00 $120,000.00 $80,000.00 $450,000.00 $350,000.00 129 Chic Smu U.S. BANKING INFORMATION Monthly average ledger balance at U.S. Bank Monthly average deposit float Monthly Service Charge_US Bank Earnings Credit Rate_US Bank Required Reserves Ratio 30/365 Wire Transfer Cost ACH cost $3,500,000.00 $750,000.00 $1,000.00 0.007 0.03 0.0822 $15 $0.50 9000 $25,000.00 2 2 0 N 2 INFO ON COLLECTIONS FROM CUSTOMERS Number of remittances per month Average face value of monthly remittances Mailfloat - in house processing Processing float - in house processing Availability float - in house processing Days float Per check Variable cost of in-house Processing Fixed Cost of in-house check processing Days float with lockbox alternative Per check variable cost of lockbox alternative Fixed Cost of lockbox alternative INFO ON DISBURSEMENTS TO SUPPLIERS Disbursements per year Check cost per check 0.4 $2,500.00 4 0.8 $3,000.00 3500 $1.50 1 2 3 4 6 7 8 9 10 11 120 130 140 15 16 Disoursements per year 3500 $1.50 $0.50 Check cost_per check ACH costs_per check upfront cost to switch fully to ACH system DAILY NET CASH FLOWS (10 days into November) Day $25,000 Net Cash Flow 1 18000 2 20000 3 23000 4 25000 26000 5 6 6 35000 7 32000 8 25000 9 26000 27000 $500,000.00 0.7 0.3 0.75 10 MONTHLY SALES FORECASTS INFORMATION October sales % of sales collected in month of sale % of sales collected in following month % of sales in Cost of goods sold Monthly lease payment Cash position end of October Target cash balance Sales forecast for November Sales forecast for December MISCELLANEOUS INFO Company's Discount Rate $125,000.00 $120,000.00 $80,000.00 $450,000.00 $350,000.00 129 Chic Smu
