vaIue 10.00 points A mail-order firm processes 6.300 checks per month. Of these.
ID: 2642512 • Letter: V
Question
vaIue 10.00 points A mail-order firm processes 6.300 checks per month. Of these. 70 percent are for $53 and 30 percent are for $85. The $53 checks are delayed two days on average: the $85 checks are delayed three days on average. Assume 30 days in a month. a-1 What is the average daily collection float? Average daily collection float $ a-2 How do you interpret your answer? On average, there is $ that is (Click to select) y and (Click to select) ? to the firm. b-1 What is the weighted average delay? (Round your answer to 2 decimal places. (e.g., 32.16)) Weighted average delay days b-2 Calculate the average daily float. Average daily float $ c. How much should the firm be willing to pay to eliminate the float? Maximum payment $ I I d. If the interest rate is 6 percent per year. calculate the daily cost of the float. (Use 365 days a year. Do not round intermediate calculations and round your final 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 2.0 days? Maximum payment $Explanation / Answer
A1- DAILY COLLECTION FLOAT = AMOUNT OF CHECKS IN PROCESS OVER MONTH / NO OF DAYS
6300 / 30 = $ 210
A2- It can be interpreted that on average $210 checks that is under the process of collection and represents credibility of firm.
B1 -
% (A) Delay days (B) (A* B) 0.7 2 1.4 0.3 3 0.9 Weighted AvgDelay 2.3Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.