Question: Looking for PV, NPV, and 2 Net Cash Flows Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined
Looking for PV, NPV, and 2 Net Cash Flows
| Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: |
| Average number of payments per day | 435 | ||
| Average value of payment | $ | 1,025 | |
| Variable lockbox fee (per transaction) | $ | .30 | |
| 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 and round your answer to the nearest whole number, e.g., 32.) |
| PV | $ |
| b. | What is the NPV of adopting the system? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| 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 answers to 2 decimal places, e.g., 32.16.) |
| Net cash flow | $ per day |
| Net cash flow | $ per check |
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