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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