1. Use the following information to answer the questions below.

• Number of checks processed per year = 25,000
• Average face value of checks = $975
• Collection float = 10 days
• Opportunity cost rate = 3%

1. Calculate and interpret total dollar-days of collection float.

2. Calculate and interpret the average dollar-days of collection float.

3. Calculate and interpret the opportunity cost of collection float.

4. Re-calculate the opportunity cost of collection float if a spike in interest rates causes the opportunity cost rate to increase to 5%.