Paper Mfg Is Investigating a Lockbox System That Would Reduce Its

question 63

Multiple Choice

Paper Mfg. is investigating a lockbox system that would reduce its collection time by two days at a cost of $.42 per transaction. The company receives an average of 498 payments per day with an average value of $1,687 each. The Treasury daily interest rate is .012 percent. What is the NPV of adopting the lockbox system?

• A) $28,506
• B) −$71,018
• C) $54,234
• D) $84,468
• E) −$62,748