What would the net annual savings be

Assignment Help Finance Basics
Reference no: EM13265535

Your firm has an average receipt size of $120. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days. You typically receive 6,800 checks per day. The daily interest rate is 0.017 percent. The bank charges a lockbox fee of $170 per day.

What is the NPV of accepting the lockbox agreement?

What would the net annual savings be if the service were adopted?

 

Reference no: EM13265535

Questions Cloud

What is the gain of an ideal amplifier connected to drive : A power amplifier employs an output stage whose gain varies from 2 to 12 for various reasons. What is the gain of an ideal (non varying) amplifier connected to drive It so that an overall gain with feedback of 100 ± 5% V/V can be achieved
Explain what happen to the density of liquid water : Describe what happen to the density of liquid water when its temperature is increased and/or decreased. properly cite your reference source(s) for this information
Calculate the terminal value using the multiple method : Free cash flow in year 5 is expected to be $145 million. MiCasa, S.A. is expected to be sold at its terminal value. Calculate the terminal value using the multiple method.
Negative message effectively : when you write a negative message what are your objectives? What are some strategies you can use to write the negative message effectively?
What would the net annual savings be : What is the NPV of accepting the lockbox agreement?
What are the requirements if af must be held : A power amplifier employs an output stage whose gam vanes from 2 to 12 for various reasons. What is the gain of an ideal (non varying) amplIfier connected to drive it so that an overall gain with feedback of 100 ± 5% V/V can be achieved
What fraction of the water boils away : A 45cm3 block of iron is removed from an 800?Cfurnace and immediately dropped into 200 mL of 20?C water. What fraction of the water boils away
Economic and social development of akhenaten dynastic reign : Describe the political, economic and social development of Akhenaten dynastic reign.
Obtain the amplitude of the motion : The position of an object connected to a spring varies with time according to the expression x = (4.8 cm) sin(9.3 ?t). Find the amplitude of the motion

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What would make for a larger increase in the stock variance

what would make for a larger increase in the stock variance an increase of 1.5 in its beta or an increase of 3% in its residual standard deviation?

  What is the aftertax cash flow from the sale of this asset

If the relevant tax rate is 35 percent, what is the aftertax cash flow from the sale of this asset?

  Mortgage-annuity and rate of return

A $20,000 mortgage is to be paid through 180 equal monthly payments, each comprising some principal along with interest on outstanding principal, at an effective rate of 3 1/2 per half year. What are the monthly payments?

  Determining the bonds-duration

An insurance company is analyzing three bonds and is using duration as the measure of interest rate risk. What is the duration for each of the bonds? What is the relationship between duration and the amount of coupon interest that is paid?

  Computation of price of the bond

Computation of price of the bond and what price should the existing bond be traded at when the new five-year bond issued

  Managing the firms liabilities

Financial managers evaluating decision options or potential actions must consider and the financial manager may be responsible for any of the following;

  Federal reserve change

Dicuss and explain three ways in which the Federal Reserve can change the money supply. If the Federal Reserve is going to adjust all of these tools during an economy that is growing too quickly, what changes would they make?

  What is the percentage price change of these bonds

Bond J is a 5 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 13 years to maturity, make semiannual payments, and have a YTM of 8 percent.

  Question on project evaluation

ABC company purchased a machine 5 years ago at cost of $100000. The machine had an expected life of 10 years at the time of purchase, and an expected salvage value of $10,000 at the end of the 10 years. Show all workings to justify your answer

  Distributions to shareholders

Mention and briefly discuss two motivations that would lead the firm to engage in stock repurchase versus a straight cash dividend. In brief describe the implications of tradeoff between dividends and free cash flow retention.

  Estimating required return on stocks

Stock A has a beta of .8, Stock B has a beta of 1, and Stock C has a beta of 1.2. Portfolio P has similar amounts invested in each of three stocks.

  Stock price and dividend problem-texas corporation

Texas Corporation stock pays a dividend on every July 15. In 2008: the dividend is $3.00, in 2009 $3.25, in 2010 $3.50, and in 2011 and all the subsequent years it will be $4.00.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd