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 adopting the system c W...

Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the

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Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following:

Average number of payments per day Average value of payment Variable lockbox fee (per transaction) Daily interest rate on money market securities 435 $785 $.43 .02%

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?

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

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Related Book For answer-question

Corporate Finance

ISBN: 978-1259918940

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Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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Question Posted: Dec 30, 2019 03:58 AM

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