A company has the following cash balances: Companys ledger balance = ($600,000) Banks ledger balance = ($625,000)

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A company has the following cash balances:

Company’s ledger balance = $$600,000$ Bank’s ledger balance = $$625,000$ Available balance = $$550,000$

a. Calculate the payment float and availability float.

b. Why does the company gain from the payment float?

c. Suppose the company adopts a policy of writing checks on a remote bank. How is this likely to affect the three measures of cash balance?

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Fundamentals Of Corporate Finance

ISBN: 9780072416275

3rd Edition

Authors: Richard A. Brealey

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Question Posted: May 29, 2024 01:00 AM

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A company has the following cash balances: Companys ledger balance = ($600,000) Banks ledger balance = ($625,000)

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Fundamentals Of Corporate Finance

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