1. Arnold Barker is considering extending credit to a group of new customers. The new customers will generate an average of $35,000 per day in new sales. On average, they will pay in 30 days. The variable cost ratio is 80% and the default rate is 10% of sales. If the cost of capital is 12%, what is the NPV of one days sales if Arnold grants credit.

2. You have $1,700 on deposit with no outstanding checks or uncleared deposits. One day you write a check for $450. Does this create a disbursement float or collection float? What is your available balance? What is your book balance?