A mail-order firm processes 5,200 checks per month. Of these, 70 percent are for

Question

A mail-order firm processes 5,200 checks per month. Of these, 70 percent are for $42 and 30 percent are for $74. The $42 checks are delayed three days on average; the $74 checks are delayed four days on average. Assume 30 days in a month.

  On average, there is $  that is (Click to select)uncollectedcollected and (Click to select)availablenot available to the firm.

What is the weighted average delay? (Round your answer to 2 decimal places. (e.g., 32.16))

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 final answer to 2 decimal places. (e.g., 32.16))

A mail-order firm processes 5,200 checks per month. Of these, 70 percent are for $42 and 30 percent are for $74. The $42 checks are delayed three days on average; the $74 checks are delayed four days on average. Assume 30 days in a month.

Explanation / Answer

Total checks collected in month are 5200

average checks processed daily =5200/30 i.e 173

$42 checks 70% and $ 74 checks 30%

$ 42 checks =173*0.70 i.e 121

$ 74 checks=173*0.30 i.e 52

Average daily collection =121*42 +52*74=8930

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