Paper Submarine Manufacturing Is Investigating a Lockbox System to Reduce

question 9

Multiple Choice

Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time.It has determined the following:
The total collection time will be reduced by 2 days if the lockbox system is adopted.What is the NPV of adopting the lockbox system?

• A) $600,000
• B) $675,000
• C) $695,000
• D) $745,000
• E) $795,000

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Definitions:

Breakfast Department

A specific business unit within a hospitality organization that is responsible for managing and operating the breakfast service.

Cost Center

is a segment of a business that does not directly generate revenue but incurs costs, like a human resources department.

Generates Revenues

The process through which a business earns income from its normal operations, typically through the sale of goods and services.

Profit Center

A unit or department that incurs costs and generates revenues.