What is the npv of the new lockbox system

Assignment Help Financial Management
Reference no: EM131346959

Bird's Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a bank located in Pittsburgh. The bank has estimated that use of the system will reduce collection time by 2.5 days. Assume 365 days a year.

  Average number of payments per day 740

  Average value of payment $ 690

  Variable lockbox fee (per transaction) $ .20

  Annual interest rate on money market securities 4.5 %

What is the NPV of the new lockbox system? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  NPV $

Suppose in addition to the variable charge that there is an annual fixed charge of $4,000 to be paid at the end of each year. What is the NPV now? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  NPV $

Reference no: EM131346959

Questions Cloud

What is stewarts energy conversion efficiency : The distance between the floors is 7.60 m. What is Stewart's energy conversion efficiency if he does not lose any weight during the climb?
Describe the ancient greek competitive character : Describe the ancient Greek competitive character, and compare the ancient Olympics (as a festival featuring athletics) to the Olympics today, identifying any major differences. Explain what the Olympic rules regarding females and evidence, such as..
Find the energy conversion efficiency : Find the energy conversion efficiency of a 2000. lbf thoroughbred racehorse with a 120. lbf jockey and tack running 1.25 miles on a flat track in 144 s.
Define the importance of leading effective change : Define the importance of leading effective change within an organization. Share two benefits of creating and accepting diversity within the organization.
What is the npv of the new lockbox system : Bird's Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a bank located in Pittsburgh. What is the NPV of the ..
Develop key capabilities in one of the three key leadership : This assessment aims to allow participants to explore and develop key capabilities in one of the three key leadership capabilities (competencies) addressed in the unit - develop skills (must be actual courses), a reading plan to acquire conceptual..
What is the horsepower output of his arms : What is the horsepower output of his arms under these conditions? Assume his arm muscles have an energy conversion efficiency of 25.0%
How does the author use this binary to convey a particular : Choose a binary in either The Monk(1796) or Frankenstein(1818). How does the author use this binary to convey a particular argument throughout the novel? Because this is a short assignment, be careful to avoid simply summarizing the text; instead,..
Calculate the contribution to profit and overhead : Determine the total contribution to profits and fixed costs from the solution generated in Part (a). Pear Computer is considering an alternative pricing strategy of price skimming. It plans to set the following schedule of prices over the coming t..

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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