Each business day, on average, a company writes checks totaling $37,000 to pay i

Question

Each business day, on average, a company writes checks totaling $37,000 to pay its suppliers. The usual clearing time for the checks is three days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $48,000. The cash from the payments is available to the firm after two days. (Enter your answer as directed, but do not round intermediate calculations.)

Calculate the company’s disbursement float, collection float, and net float. (Negative amounts should be indicated by a minus sign.)

Calculate the company's disbursement float, collection float, and net float, if the collected funds were available in one day instead of two. (Negative amounts should be indicated by a minus sign.)

Each business day, on average, a company writes checks totaling $37,000 to pay its suppliers. The usual clearing time for the checks is three days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $48,000. The cash from the payments is available to the firm after two days. (Enter your answer as directed, but do not round intermediate calculations.)

Explanation / Answer

a Disbursement float is 37,000 * 3 i.e.amount of payable*clearing time for the checks 111000 collection float is 48000*2 96000 Net float is disbursement float - collection float 15000 b Disbursement float is 37,000 * 3 i.e.amount of payable*clearing time for the checks 111000 collection float is 48000*1 48000 Net float is disbursement float - collection float 63000

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