Question
In: Finance
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined...
|
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: |
| Average number of payments per day | 405 | ||
| Average value of payment | $ | 995 | |
| 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.) |
| 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.) |
| 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.) |
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 10 months agoRelated Solutions
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined...
Paper Submarine Manufacturing is investigating a lockbox system
to reduce its collection time. It has determined the following:
Average number of payments per day
340
Average value of payment
$
930
Variable lockbox fee (per transaction)
$
0.30
Daily interest rate on money market securities
0.068
%
The total collection time will be reduced by four days if the
lockbox system is adopted.
a.
What is the PV of adopting the system?
PV
$
...
A company is considering a lockbox system that will reduce the collection time by 2 days...
A company is considering a lockbox system that will reduce the
collection time by 2 days on average. The company can earn an APR
of 3.82% compounded daily on any cash balance. The average number
of daily payments submitted to the lockbox is 1,969 with an average
cheque size of $71. If the processing fee per cheque is $0.01, what
is the NPV of adopting this lockbox? (Assume 365 days in one
year.)
Question 2 options:
$91,461
$93,747
$96,034
$98,320...
How does a lockbox collection system reduce the three components of collection float? Describe the principal...
How does a lockbox collection system reduce the three components
of collection float?
Describe the principal cash transfer tools
List the costs and benefits of running a cash concentration
system
A bank manager has developed a new system to reduce the time customers spend waiting for...
A bank manager has developed a new system to reduce the time
customers spend waiting for teller service during peak hours. The
manager hopes the new system will reduce the waiting time that
currently is 10 minutes.
Formulate the hypotheses and rejection rule for this
problem.
A random sample of 70 waiting times was obtained after the
system was implemented. The sample showed a sample mean of 9.5
minutes and a standard deviation of 2.2 minutes. Obtain the
p-value.
At...
Recall that a bank manager has developed a new system to reduce the time customers spend...
Recall that a bank manager has developed a new system to reduce
the time customers spend waiting to be served by tellers during
peak business hours. The mean waiting time during peak business
hours under the current system is roughly 9 to 10 minutes. The bank
manager hopes that the new system will have a mean waiting time
that is less than six minutes. The mean of the
sample of 100 bank customer waiting times in Table 1.9
is 5.46....
A bank manager has developed a new system to reduce the time customers spend waiting to...
A bank manager has developed a new system to reduce the time
customers spend waiting to be served by tellers during peak
business hours. The bank manager hopes that the new system will
lower the average waiting time to less than six minutes. A
one-month trial of the system is conducted and 25 customers have
been selected and the waiting times were recorded. The sample
resulted in a mean of 5.2 minutes and a standard deviation of 2.4
minutes. a-...
Recall that a bank manager has developed a new system to reduce the time customers spend...
Recall that a bank manager has developed a new system to reduce
the time customers spend waiting for teller service during peak
hours. The manager hopes the new system will reduce waiting times
from the current 9 to 10 minutes to less than 6 minutes.
Suppose the manager wishes to use the
random sample of 100 waiting times to support the claim that the
mean waiting time under the new system is shorter than six
minutes.
Letting μ represent the...
Recall that a bank manager has developed a new system to reduce the time customers spend...
Recall that a bank manager has developed a new system to reduce
the time customers spend waiting for teller service during peak
hours. The manager hopes the new system will reduce waiting times
from the current 9 to 10 minutes to less than 6 minutes.
Suppose the manager wishes to use the
random sample of 100 waiting times to support the claim that the
mean waiting time under the new system is shorter than six
minutes.
Letting μ represent the...
Recall that a bank manager has developed a new system to reduce the time customers spend...
Recall that a bank manager has developed a new system to reduce
the time customers spend waiting to be served by tellers during
peak business hours. The mean waiting time during peak business
hours under the current system is roughly 9 to 10 minutes. The bank
manager hopes that the new system will have a mean waiting time
that is less than six minutes. The mean of the sample of 90 bank
customer waiting times is x⎯⎯ x ¯ =...
Recall that a bank manager has developed a new system to reduce the time customers spend...
Recall that a bank manager has developed a new system to reduce
the time customers spend waiting to be served by tellers during
peak business hours. The mean waiting time during peak business
hours under the current system is roughly 9 to 10 minutes. The bank
manager hopes that the new system will have a mean waiting time
that is less than six minutes. The mean of the sample of 99 bank
customer waiting times is x¯
= 5.44. If...
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