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A mail-order firm processes 4,800 checks per month. Of these, 60 percent are for $38 and 40 percent are for $70. The $38 checks are delayed three days on average; the $70 checks are delayed four days on average. Assume 30 days in a month.

a-1	What is the average daily collection float?

Average daily collection float

$

a-2	How do you interpret your answer?

On average, there is $ that is (Click to select)collecteduncollected and (Click to select)availablenot available to the firm.

b-1	What is the weighted average delay? (Round your answer to 2 decimal places. (e.g., 32.16))

Weighted average delay

days

b-2	Calculate the average daily float.

Average daily float

$

c.	How much should the firm be willing to pay to eliminate the float?

Maximum payment

$

d.	If the interest rate is 7 percent per year, calculate the daily cost of the float. (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Daily cost of the float

$

e.	How much should the firm be willing to pay to reduce the weighted average float to 1.5 days?

Maximum payment

$