Each business day, on average, a company writes checks totaling $13,200 to pay its suppliers. The usual
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Each business day, on average, a company writes checks totaling $13,200 to pay its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $23,800. The cash from the payments is available to the firm after two days.
a. Calculate the company’s disbursement float, collection float, and net float.
b. How would your answer to part (a) change if the collected funds were available in one day instead of two?
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a The disbursement float is the average daily checks written ...View the full answer
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Related Book For
Corporate Finance
ISBN: 978-1259918940
12th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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