Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A mail-order firm processes 6,000 checks per month of these, 70 percent are for $50 and 30 percent are for $82. The $50 checks are

image text in transcribed
A mail-order firm processes 6,000 checks per month of these, 70 percent are for $50 and 30 percent are for $82. The $50 checks are delayed three days on average, the $82 checks are delayed four days on average. Assume 30 days per month a-1. What is the average daily collection float? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Average daily collection float a-2. How do you interpret your answer? On average, there is $ that is (Click to select) and (Click to select) to the firm. b-1. What is the weighted average delay? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Weighted average delay days b-2. Calculate the average daily float. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Average daily float c. How much should the firm be willing to pay to eliminate the float? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Maximum payment d. If the interest rate is 6 percent per year, calculate the daily cost of the float. (Use 365 days a year. Do not round intermediate calculations and round your 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 by 2 days? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Maximum payment

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions