cash collection and npv
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Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: |
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| Average number of payments per day | 375 | ||
| Average value of payment | $ | 965 | |
| Variable lockbox fee (per transaction) | $ | .35 | |
| Daily interest rate on money market securities | .068 | % | |
| 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? (Do not round intermediate calculations.) |
| PV | $ |
| b. | What is the NPV of adopting the system? (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.) |
| NPV | $ |
| c. | What is the net cash flow per day from adopting the lockbox system? Per check? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) |
| Net cash flow | $ per day |
| Net cash flow | $ per check |
10 years ago
cash collection and npv A+ Tutorial use as Guide
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cash_collection_and_npv.docx
