My question is Q 2 calculating net float , thank you very much !
muut ! Il you say yes, then why? In particular, who is harmed? gunethical - PROBLEMS connect FINANCE 1. Calculating Float (LO1In a typical month, the Murray Corporation receives 80 checks totaling $124,000. These are delayed four days on average. What is the average daily float? Assume 30 days in a month. Calculating Net Float (LO1] Each business day, on average, a company writes checks totaling $16,000 to pay its suppliers. The usual clearing time for the checks is! four days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $21,000. The cash from the payments is available to the firm after two days. a. Calculate the company's disbursement float, collection float, and net float. b. How would your answer to part (a) change if the collected funds were available in one day instead of two? Costs of Float [LO1] Purple Feet Wine, Inc., receives an average of $19,000 in checks per day. The delay in clearing is typically three days. The current interest rate is .017 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? Float and Weighted Average Delay [LO1] Your neighbor goes to the post office once a month and picks up two checks, one for $13,000 and one for $4,500. The larger check takes four days to clear after it is deposited; the smaller one takes three days. Assume 30 days in a month. a. What is the total float for the month? b. What is the average daily float? c. What are the average daily receipts and weighted average delay? NPV and Collection Time [LO2] Your firm has an average receipt size of $14. A bank has approached you concerning a lockbox service that will decrease you total collection time by two days. You typically receive 5,600 checks per day. In daily interest rate is .016 percent. If the bank charges a fee of $175 per day, should the lockbox project be accepted? What would the net annual savings be if the service were adopted? 4. TL Woighted Avorno Talou 11 ilder firm processes 4 900 check muut ! Il you say yes, then why? In particular, who is harmed? gunethical - PROBLEMS connect FINANCE 1. Calculating Float (LO1In a typical month, the Murray Corporation receives 80 checks totaling $124,000. These are delayed four days on average. What is the average daily float? Assume 30 days in a month. Calculating Net Float (LO1] Each business day, on average, a company writes checks totaling $16,000 to pay its suppliers. The usual clearing time for the checks is! four days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $21,000. The cash from the payments is available to the firm after two days. a. Calculate the company's disbursement float, collection float, and net float. b. How would your answer to part (a) change if the collected funds were available in one day instead of two? Costs of Float [LO1] Purple Feet Wine, Inc., receives an average of $19,000 in checks per day. The delay in clearing is typically three days. The current interest rate is .017 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? Float and Weighted Average Delay [LO1] Your neighbor goes to the post office once a month and picks up two checks, one for $13,000 and one for $4,500. The larger check takes four days to clear after it is deposited; the smaller one takes three days. Assume 30 days in a month. a. What is the total float for the month? b. What is the average daily float? c. What are the average daily receipts and weighted average delay? NPV and Collection Time [LO2] Your firm has an average receipt size of $14. A bank has approached you concerning a lockbox service that will decrease you total collection time by two days. You typically receive 5,600 checks per day. In daily interest rate is .016 percent. If the bank charges a fee of $175 per day, should the lockbox project be accepted? What would the net annual savings be if the service were adopted? 4. TL Woighted Avorno Talou 11 ilder firm processes 4 900 check
