Purple Feet Wine, Inc., receives an average of $6,000 in checks per day. The delay in clearing

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Purple Feet Wine, Inc., receives an average of $6,000 in checks per day. The delay in clearing is typically five days. The current interest rate is .025 percent per day.

a. What is the company’s float?

b. What is the most Purple Feet 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?

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Fundamentals Of Corporate Finance

ISBN: 9780072553079

6th Edition

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

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Question Posted: Oct 04, 2023 02:24 PM

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Purple Feet Wine, Inc., receives an average of $6,000 in checks per day. The delay in clearing

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a Float is the amount of money that a company has available to use before checks have cleared Purple ...View the full answer

Fundamentals Of Corporate Finance

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