Costs of Float Purple feet wine, Inc., receives an average of $11,000 in checks per day. The

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Costs of Float Purple feet wine, Inc., receives an average of $11,000 in checks per day. The delay in clearing is typically four days. The current interest rate is .016 percent per day.

a. What is the company’s float?

b. What is the most Purple Feet should be willing to pay today to elimination its float entirely?

c. What is the highest daily fee the company should be willing to pay to eliminate its float entirely?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

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Question Posted: May 09, 2011 06:18 AM

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Costs of Float Purple feet wine, Inc., receives an average of $11,000 in checks per day. The

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a The collection float is the average daily checks received times the average number of ...View the full answer

Fundamentals of Corporate Finance

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