What would the net annual savings be if service were adopted

Assignment Help Financial Management
Reference no: EM13929712

Your firm has an average receipt size of $145. A bank has approached you concerning a lockbox service that will decrease your total collection time by one day. You typically receive 6,100 checks per day. The daily interest rate is .017 percent. The bank charges a lockbox fee of $115 per day.

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

NPV       $  

What would the net annual savings be if the service were adopted? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Net annual savings         

$  

Need help finding the net annual savings. i have sent this question in twice already seaking help and have yet to get a response with the right answer.

Reference no: EM13929712

Questions Cloud

Good benchmark to use for each of these financial ratios : Define the current ratio and return on assets ratio. State what financial management problem each of these financial ratios could be used to identify. What would be a good benchmark to use for each of these financial ratios?
Prepare an annotated bibliography of articles on ethics : What are the problems, issues, main concerns of the article or book? If this is a research article what is the research problem?
Banking crisis just started-reducing availability of credit : Describe one way that a financial manager of a retail company would efficiently adjust his company’s financial management practices to each of the following changes in market conditions: (a) a big competitor enters the market; (b) technological progr..
Record the 2013 events in general journal form and post them : What is the net realizable value of the accounts receivable at December 31, 2013?
What would the net annual savings be if service were adopted : Your firm has an average receipt size of $145. A bank has approached you concerning a lockbox service that will decrease your total collection time by one day. You typically receive 6,100 checks per day. What is the NPV of accepting the lockbox agree..
Experiencing rapid growth-what is the projected dividend : Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 28 percent per year during the next three years, 18 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 11 percen..
When is it appropriate to speak out on ethical issues : Do leaders have a greater responsibility than modeling ethical behavior? What responsibilities do leaders have for creating ethical organizations  When is it appropriate to speak out on ethical issues?
What is the discounted payback period at discount rate : A project has an initial cash outflow of $1,110 and cash inflows of $315 per year for 4 years. What is the discounted payback period at a discount rate of 9.1 percent?
Cost of capital have to increase for the npv to be zero : The management team of a cable company estimates that the cost of installing new cable in a certain area of the city is $17 million. However, they will receive a cash flow of $1.4 million per year indefinitely. The net present value (NPV) of this inv..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the market value of the bond

A fourteen-year bond, with par value equals $1,000, pays 10% annually. If similar bonds are currently yielding 9% annually, what is the market value of the bond? Use semi-annual analysis.

  Defences to the formation of valid and enforceable contract

Identify and discuss the various defences to the formation of a valid and enforceable contract. Discuss how a Christian leader would respond to the possibility of backing out of a contractual obligation through use of a legal “loophole.”

  What was the most recent dividend per share paid on stock

Gontier Corporation stock currently sells for $64.93 per share. The market requires a return of 12 percent on the firm’s stock. If the company maintains a constant 5.5 percent growth rate in dividends, what was the most recent dividend per share paid..

  Suppose your friend pat approaches you with a plan to get

suppose your friend pat approaches you with a plan to get in on the solar panel leasing business. pat has identified an

  Form of derivative contract

A survey by Fitch Ratings found that capital market participants felt that Credit Default Swaps, a form of derivative contract that pays off if the named underlier defaults on its debt obligations, are both more important as indicators of counterp..

  Effective interest rate

Effective interest rate. You borrow $55,000; the annual loan payments are $3,180.66 for 30 years. What interest rate are you being charged?

  After tax cash flow from the sale of this asset

Consider an asset that costs $484,000 and is depreciated straight-line to zero over its 12-year tax life. The asset is to be used in a 6-year project; at the end of the project, the asset can be sold for $60,500.

  Initial investment-cash inflow-calculate net present value

Calculate the net present value of a 20 year project with an initial investment of $15,000 and a cash inflow of $2,000 per year. Assume that the firm has an opportunity cost of 17%.

  What will be the value of equity after the restructuring

Consider an unlevered firm with EBIT of $6 million and 1 million shares of common equity outstanding. The required rate of return on the firm’s assets is 10%. The firm has a corporate tax rate of 40%. The firm is considering issuing $18 million in de..

  What is the present value of your offer

You have just been offered a job. Your base salary will be $75,000 per year and the first year’s annual salary will be received one year from the day you start working. You receive a bonus immediately of $12,500. Your salary will grow 4 percent per y..

  Risk Free Return

If the current exchange rate is $1.25/£, the one-year forward exchange rate is $1.40/£, and the interest rate on British government bills is 10.50% per year, what risk-free dollar denominated return can be locked in by investing in the British bills?..

  What is the total yield of the investment

A bond that returns 4% annually and matures in 6 years. If you purchased the bond during the IPO at par, and similar bonds in today’s market are returning only 3% annually, what is the total yield of the investment?

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