FINA 6341 fall 2017: fall 2017 A Hunter Casselberry FINANCE chap 27 hw instructi

Question

FINA 6341 fall 2017: fall 2017 A Hunter Casselberry FINANCE chap 27 hw instructions I help Question 3 (of 5) Save & Exit Submit value: 10.00 points Purple Feet Wine, Inc., receives an average of $19,500 in checks per day. The delay in clearing is typically two days. The current interest rate is.016 percent per day a. What is the company's float? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Company's float b. What is the most the company should be willing to pay today to eliminate its float entirely? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Maximum payment c. What is the highest daily fee the company should be willing to pay to eliminate its float entirely? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Maximum daily charge References eBook & Resources Worksheet Difficulty: 1 Basic Section: 27 2 Understanding Float

Explanation / Answer

a). Solution :- Float of company = 19500 * 2

= $ 39000.

Conclusion :- Float of company = $ 39000.

b). Answer :- Maximum payment that company is willing to pay now for the elimination of float = $ 39000.

c). Answer :- Maximum daily charge = 39000 * 0.016 %

= $ 6.24

Conclusion :- Maximum daily charge = $ 6.24 (approx).

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