You have $$10,000$ in your checking account. You just deposited a check for $$5,000$ and wrote a check for $$3,500.$

a$.$ What is the disbursement float?

b$.$ What is the collection float?

c$.$ What is the net float?

d$.$ What is your book balance?

e$.$ What is your available balance?

$2.$ Suppose you mail a check each month for $$3,000$ and it takes $4$ days to reach its destination, $2$ days to process, and $1$ day before the bank makes the cash available. What is the average daily float $($assuming $30-$day months$)?$

$3.$ Suppose the average daily float is $$6$ million with a weighted average delay of $5$ days.

a$.$ What is the total amount unavailable to earn interest?

b$.$ What is the NPV of a project that could reduce the delay by $4$ days if the cost is $$20$ million?

$4.$ A proposed single lockbox system will reduce collection time $3$ days on average.

Daily interest rate on T$-$bills $=0\mathrm{.}01\%.$

Average number of daily payments to the lockbox is $4,000.$

Average size of payment is $$500.$

The processing fee is $$0\mathrm{.}12$ per check plus $$10$ to wire funds each day.

What is the maximum investment that would make this lockbox system acceptable?