Purple Feet Wine, Inc., receives an average of $13,800 in checks per day. The delay in clearing

Question:

Purple Feet Wine, Inc., receives an average of $13,800 in checks per day. The delay in clearing is typically three days. The current interest rate is .018 percent per day.

a. What is the company's float?

b. What is the most the company should be willing to pay today to eliminate its float entirely?

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

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Corporate Finance

ISBN: 978-0077861759

11th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

See More Books

Question Posted: Jun 22, 2017 10:11 AM

See More Questions

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...
Huangs television-repair service receives an average of four TV sets per 8-hour day to be repaired. The service manager would like to be able to tell customers that they can expect their TV back in 3...
Purple Feet Wine, Inc., receives an average of $17,000 in checks per day. The delay in clearing is typically three days. The current interest rate is .017 percent per day. a. What is the companys...
Project P costs $15,000 and is expected to produce benefits (cash flows) of $4,500 per year for five years. Project Q costs $37,500 and is expected to produce cash flows of $11,100 per year for five...
Refer to figure, where Zg = 25?, Zo = 50?, ZL = 150?, ? = 150 m, u = c. If at f = 0, the pulse shown in figure is incident on the line(a) Draw the voltage and current bounce diagrams.(b) Determine...
10- need help please? Explain in your own words the value behind educators using puppets to foster social and emotional skills. You may like to refer to the reading 'Tips for using puppets to promote...
Compute Topp Companys price-earnings ratio if its common stock has a market value of $32.60 per share and its EPS is $3.95. Would an analyst likely consider this stock potentially over- or...
Ekman Company issued $1,000,000, 10-year bonds and agreed to make annual sinking fund deposits of $78,000. The deposits are made at the end of each year into an account paying 5% annual interest....
On April 1, 2019, E Ltd. made a loan of $100,000 to Mr. Walker, a new employee of the corporation, to assist him in purchasing a residence when he moved from Quebec to commence employment in British...
Consider the following workload: a. Show the schedule using shortest remaining time, non-preemptive priority (a smaller priority number implies higher priority) and round robin with quantum 30 ms....
Each business day, on average, a company writes checks totaling $14,400 to pay its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is receiving payments from...
Your neighbor goes to the post office once a month and picks up two checks, one for $9,700 and one for $2,600. The larger check takes four days to clear after it is deposited; the smaller one takes...
Rule of 78 With a typical installment loan, you are asked to sign a contract stating the terms of repayment. If you pay off the loan early, you are entitled to an interest rebate. For example, if you...
If Technical Specification 2 were reduced in the next design for this product, what would likely happen to customer opinion of Value Feature A? Quick Start QFD Matrix 2 Strong positive correlation...
Customer opinion of Value Feature B is most strongly correlated with what technical specification? Quick Start QFD Matrix 2 Strong positive correlation Some positive correlation == Strong negative...
Consider Quick Start QFD Matrix 1 above. Of the two value features, which do cus- tomers consider three times more important? Quick Start Quick Start QFD Matrix 1 = Strong positive correlation = Some...
Which technical spec can be most easily modified without changing current choices for the other two technical specs? Quick Start Quick Start QFD Matrix 1 = Strong positive correlation = Some positive...
Use Table A.1 to select 20 three-digit random numbers. Did any of the numbers occur more than once? How is it possible for a number to occur more than once? Make a stem-and-leaf plot of the numbers...
List the benefits of IoT for consumers.
Calculate the Lagrange polynomial P 2 (x) for the values (1.00) = 1.0000, (1.02) = 0.9888, (1.04) = 0.9784 of the gamma function [(24) in App. A3.1] and from it approximations of (1.01) and (1.03).
Solve for the unknown number of years in each of the following: PRESENT VALUE YEARS INTEREST RATE FUTURE VALUE $ 625 6% $ 1,284 810 9 4,341 18,400 7 234,162 21,500 10 215,000
Find the EAR in each of the following cases: APR NUMBER OF TIMES COMPOUNDED EAR 9.8% Quarterly 12.4 Monthly 7.6 Daily 8.4 Infinite
This problem illustrates a deceptive way of quoting interest rates called add-on interest. Imagine that you see an advertisement for Crazy Judys Stereo City that reads something like this: $2,500...
Break-Even Sales and Sales to Realize Income from Operations For the current year ending October 31, Yentling Company expects fixed costs of $537,600, a unit variable cost of $50, and a unit selling...
You buy a stock for $35 per share. One year later you receive a dividend of $3.50 per share and sell the stock for $30 per share. What is your total rate of return on this investment? What is your...
Filippucci Company used a budgeted indirect-cost rate for its manufacturing operations, the amount allocated ($200,000) is different from the actual amount incurred ($225,000). Ending balances in the...

Purple Feet Wine, Inc., receives an average of $13,800 in checks per day. The delay in clearing

Question:

Step by Step Answer:

Input Area Value of checks per day 13800 Cle...View the full answer

Corporate Finance

Students also viewed these Corporate Finance questions