Value of Lockboxes paper submarine Manufacturing is investigating a lockbox system to reduce its collection time It has determined the following 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 b What is the NPV of adop...

a The present value of adopting the system is the number of days collections are reduced times the a ...

Value of Lockboxes paper submarine Manufacturing is investigating a lockbox system to reduce its collection time. It

Question:

Value of Lockboxes paper submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following.

Average number of payments per day 410 Average value of payment S1,350 Variable lockbox fee (per transaction) Daily inte

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?

b. What is the NPV of adopting the system?

c. What is the net cash flow per day from adopting per check?

Lockboxes
Lockbox banking is a service provided by banks to companies for the receipt of payment from customers. Under the service, the payments made by customers are directed to a special post office box instead of going to the company. The bank goes to the...