1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lukranit [14]
2 years ago
9

Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following:

Business
2 answers:
erik [133]2 years ago
5 0

Answer:

$770,245

Explanation:

The reduction in cash balances associated with implementing the system can be calculated as follows;

Average Value of collection for 4 days = Average daily cash receipts x Reduction in collection time

<em>Where;</em>

Average daily cash receipts = Average number of payments per day x Average value of payment

Average daily cash receipts = 355 x $945

Average daily cash receipts = $335,475

Reduction in collection time = 4

Average Value of collection for 4 days = $335,475 x 4

Average Value of collection for 4 days = $1,341,900

Lockbox fee per day = Average number of payments per day x Variable lockbox fee (per transaction)

<em>where;</em>

Variable lockbox fee (per transaction) = $0.30

Lockbox fee per day = 355 x $0.30

Lockbox fee per day = $106.50

Annual Interest Rate = 0.068

Since all the values are on a day basis, so let us find the value on interest per day, as follows;

Daily Interest Rate = Annual Interest Rate / No. of days in a year

Daily Interest Rate = 0.068 / 365

Daily Interest Rate = 0.0001232877

Hence, Present Value of the Lock Box can be calculated as follows;

Present Value of Lock Box = Lockbox fee per day / Daily Interest Rate

Present Value of Lock Box = $106.50 / 0.0001863014

Present Value of Lock Box = $571,654

Therefore the NPV of the Lock Box can be calculated as follows;

NPV of the Lock Box = Average Value of collection for 1.5 days - Present Value of Lock Box

NPV of the Lock Box = $1,341,900 - $571,654

NPV of the Lock Box = $770,245

Since the value of NPV is positive, Paper Submarine Manufacturing, should consider using the lock box system.

Ostrovityanka [42]2 years ago
3 0

Answer:

-1,185,282.35‬

Explanation:

The average daily collections are the average number of payments times the average value of a payment, so:

Average daily collections = =355 * 945

Average daily collections = $335,475

The present value of the lockbox service is the average daily receipts times the number of days the collection is reduced, so:

     PV = (4 day reduction)( $335,475)

     PV = $1,341,900‬

 The daily cost is a perpetuity. The present value of the cost is the daily cost divided by the daily interest rate. So:      

     PV of cost = (.3*355)/.00068

           PV of cost = $106.5/.00068= $156,617.65

     The firm should take the lockbox service. The NPV of the lockbox is the cost plus the present value of the reduction in collection time, so:

     NPV = $156,617.65 - 1,341,900

           NPV = -1,185,282.35‬

You might be interested in
Frans paid R9600 as interest on a loan he took 5 years ago at 16% rate. What's was the amount he took as loan?
chubhunter [2.5K]

\bold{{Answer}}

Any choices?

3 0
3 years ago
During a presentation, promptly complying with requests raised by audience members
ludmilkaskok [199]

During a demonstration, promptly responding to audience members' requests creates your reputation as responsive.

What defines an audience?

An audience is a collection of people who attend a performance or confront a piece of art, literary works (in that they are referred to as "readers"), theater, music (in they are referred to as "hearers"), games consoles (in that they are referred to as "players"), or scholars in any medium.

What is an instance of an audience?

An audience is a crowd of individuals who attend an event. Those who attend an e-sports incident to witness others play a game, for example, are part of a viewer. The image depicts thousands of people crammed into a sphere to witness an e-sports event.

To know more about Audience visit:

brainly.com/question/1802560

#SPJ4

6 0
1 year ago
Confirm accounts receivable ending balances and sales terms, such as right of return and consignment arrangements.
Andrei [34K]

Confirm accounts receivable ending balances and sales terms, such as right of return and consignment arrangements.--  Existence and accuracy

What is an Accounts Receivable Confirmation?

When an auditor is examining the accounting records of a client company, a primary technique for verifying the existence of accounts receivable is to confirm them with the company's customers. The auditor does so with an accounts receivable confirmation

What does it mean to confirm account?

Account verification is the process of verifying that a new or existing account is owned and operated by a specified real individual or organization. A number of websites, for example social media websites, offer account verification services.

Learn more about Confirm account receivable:

brainly.com/question/13655761

#SPJ4

7 0
1 year ago
An increase in expected future income​ ______.
nataly862011 [7]

Answer: A

Explanation: Increase the supply of loanable funds today because households with larger expected future income will save more today

5 0
3 years ago
True or false: being an actor is required for a director's complete training.
gayaneshka [121]
False. 

In theatre, a director's role and training is independent and separate from that of an actor. The two roles are distinct and do not require participation as the other in order to complete each. A director's training will be complete through activity other than working or being an actor in a production. 
4 0
3 years ago
Other questions:
  • Managerial performance can be measured in many different ways including return on investment (ROI) and residual income. A good r
    15·1 answer
  • You plan on purchasing the stock of Red Cigars Inc. and you expect it to pay a dividend of​ $3.15 in 1​ year, $3.55 in 2​ years,
    9·1 answer
  • Nivea became the leader in the skin cream class on the "gentle," "protective," and "caring" platform. The company further moved
    12·1 answer
  • Characterize the types of investments that are most vulnerable to political risk. Characterize those that are least vulnerable.
    13·1 answer
  • Pearl Company has been having difficulty obtaining key raw materials for its manufacturing process. The company therefore signed
    10·1 answer
  • If the economy booms, Meyer&amp;Co. stock will have a return of 20.4 percent. If the economy goes into a recession, the stock wi
    11·1 answer
  • The following information pertains to the Flying Fig​ Corporation: Total Units for information given ​7,000 Fixed Cost per Unit
    12·1 answer
  • Flounder has year-end account balances of Sales Revenue $843,779, Interest Revenue $12,160, Cost of Goods Sold $531,052, Adminis
    5·1 answer
  • Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is re
    12·1 answer
  • Purchasing professionals need to ________ and ________ in order to find the right supplier.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!