How much should firm be willing to pay to eliminate float

Assignment Help Financial Management

Reference no: EM131608318

A mail-order firm processes 5,800 checks per month. Of these, 70 percent are for $48 and 30 percent are for $80. The $48 checks are delayed three days on average; the $80 checks are delayed four days on average. Assume 30 days in a month.

a-1 What is the average daily collection float? (Do not round intermediate calculations.) Average daily collection float $

a-2 How do you interpret your answer? (Do not round intermediate calculations.) On average, there is $ that is and 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.) Average daily float $

c. How much should the firm be willing to pay to eliminate the float? (Do not round intermediate calculations.) Maximum payment $

d. If the interest rate is 5 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 to 1.5 days? (Do not round intermediate calculations.) Maximum payment $

Reference no: EM131608318

Questions Cloud

Draft sandra''s certificate of incorporation : Sandra Seller wants to form a corporation. She has a thriving business in which she buys cheap jewelry and then re-sells it at her store at a substantial profit

Example methods from the lectures : In this exercise, you will develop your own encryption method. It may have some basis in one of the example methods from the lectures

Wap-uses repetition and switch statements to print the song : ("The Twelve Days of Christmas" Song) Write a program that uses repetition and switch statements to print the song "The Twelve Days of Christmas."

Discuss two vlan attacks from experience : How did you secure the network? If you do not have experience, research two VLANs cases and discuss the cases in two paragraphs.

How much should firm be willing to pay to eliminate float : What is the average daily collection float? Calculate the average daily float. How much should the firm be willing to pay to eliminate the float?

Discuss designer babies- genetically engineering humans : Discuss Designer Babies- Genetically Engineering humans

How can the sender be informed about the situation : Suppose a computer sends a frame to another computer on a bus topology LAN. the physical destination address of the frame is corrupted during transmission

List and describe three basic levels of market efficiency : List and describe the three basic levels of market efficiency. The constant growth model requires what information for computing shareholders' required return?

Describe case related to the world population growth : (World Population Growth) World population has grown considerably over the centuries. Continued growth could eventually challenge the limits of breathable air.

User Account

All Pages