A lockbox arrangement and firm net float in dollars

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Reference no: EM132016111

1. A lockbox arrangement is:

a. a method for the safe-keeping of marketable securities.

b. a system for slowing down cash disbursements.

c. a system for speeding up a firm's collections of checks received.

d. a system for speeding up a firm's disbursement of checks to the customers.

e. used to identify inventory safety stocks.

2. Jumpdisk Company writes checks averaging $15,000 a day, and it takes 5 days for these checks to clear. The firm also receives checks in the amount of $17,000 per day, but the firm loses three days while its receipts are being deposited and cleared. The firm's net float in dollars is:

a. $16,000.

b. $32,000.

c. $126,000.

d. $75,000.

e. $24,000.

Reference no: EM132016111

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