On an average day, your firm receives $11,800 in checks from customers. These checks clear the bank in an average of 2.8 days

On an average day, your firm receives $11,800 in checks from customers. These checks clear the bank in an average of 2.8 days. The applicable daily interest rate is 0.015 percent. What is the highest daily fee your firm should pay to completely eliminate the collection float? Assume each month has 30 days.    A.  $3.72 B.  $4.96 C.  $17.78 D.  $34.18 E.  $37.20 Maximum daily fee = $11,800 × 2.8 × 0.00015 = $4.96

64.

On an average day, Wilson & Wilson receives $7,800 in checks from customers. These checks clear the bank in an average of 1.7 days. The applicable daily interest rate is 0.022 percent. What is the highest daily fee this firm should pay to completely eliminate its collection float? Assume each month has 30 days.    A.  $1.72 B.  $2.92 C.  $17.20 D.  $24.30 E.  $29.17 Maximum daily fee = $7,800 × 1.7 × 0.00022 = $2.92

65.

Your average customer is located 4.3 mailing days away from your firm. You have determined that, on average, it is taking your staff 1.5 days to process payments received from customers. In addition, it takes an average of 2.8 days for your funds to be available for use once you have made your bank deposit. What is your firm's collection time?    A.  2.2 days B.  3.7 days C.  4.3 days D.  5.8 days E.  8.6 days Collection time = 4.3 + 1.5 + 2.8 = 8.6 days

66.

It takes your firm 4.5 days to prepare and mail out all the monthly statements to your customers. On average, the mail time between your firm and your customers is 2.6 days. Customer checks take an average of 1.8 days to clear the bank. You have determined that your total average collection time is 6.1 days. How long, on average, does it take your firm to process the payments from customers?    A.  1.7 days B.  2.6 days C.  4.4 days D.  4.8 days E.  6.2 days Processing time = 6.1 - 2.6 - 1.8 = 1.7 days

The Metallurgical Specialty Co. deals strictly with four customers. The average amount each customer pays per month

The Metallurgical Specialty Co. deals strictly with four customers. The average amount each customer pays per month along with the collection delay associated with each payment is shown below. Given this information, what is the weighted average delay? Assume each month has 30 days.        A.  1.98 days B.  2.04 days C.  2.09 days D.  2.16 days E.  2.23 days Total monthly collections = $287,000 + $416,000 + $139,000 + $233,000 = $1,075,000 Weighted average delay = [($287,000/$1,075,000) × 4] + [($416,000/$1,075,000) × 1] + [($139,000/$1,075,000) × 1] + [($233,000/$1,075,000) × 3] = 2.23 days

61.

On an average day, Goose Down Feathers receives $2,400 in checks from customers. These checks clear the bank in an average of 2.2 days. The applicable daily interest rate is 0.04 percent. What is the present value of the float? Assume each month has 30 days.    A.  $115.20 B.  $618.40 C.  $4,080.00 D.  $5,280.00 E.  $6,256.50 Present value of the float = $2,400 × 2.2 = $5,280

62.

On an average day, Town Center Hardware receives $2,420 in checks from customers. These checks clear the bank in an average of 2.1 days. The applicable daily interest rate is 0.025 percent. What is the maximum amount this store should pay to completely eliminate its collection float? Assume each month has 30 days.    A.  $1,152.38 B.  $1,288.15 C.  $2,109.16 D.  $4,637.33 E.  $5,082.00 Maximum cost = Present value of the float = $2,420 × 2.1 = $5,082.00

Atlas Builders deals strictly with five customers. The average amount each customer pays per month along

Atlas Builders deals strictly with five customers. The average amount each customer pays per month along with the collection delay associated with each payment is shown below. Given this information, what is the amount of the average daily receipts? Assume every month has 30 days.        A.  $1,143.33 B.  $2,546.67 C.  $2,983.33 D.  $6,166.67 E.  $6,860.00 Average daily receipts = ($6,800 + $8,500 + $2,000 + $9,500 + $7,500)/30 = $1,143.33

57.

National Exporters deals strictly with two customers. The average amount each customer pays per month along with the collection delay associated with each payment is shown below. Given this information, what is the amount of the average daily receipts? Assume that every month has 30 days.        A.  $2,653.33 B.  $3,006.33 C.  $4,533.33 D.  $7,811.67 E.  $8,600.00 Average daily receipts = ($63,200 + $72,800)/30 = $4,533.33

58.

Cross Country Trucking provides transportation services exclusively for four customers. The average amount each customer pays per month along with the collection delay associated with each payment is shown below. Given this information, what is the weighted average delay? Assume each month has 30 days.        A.  2.11 days B.  2.27 days C.  2.46 days D.  2.50 days E.  2.78 days Total monthly collections = $64,000 + $88,200 + $96,500 + $47,900 = $296,600 Weighted average delay = [($64,000/$296,600) × 2] + [($88,200/$296,600) × 3] + [($96,500/$296,600) × 2] + [($47,900/$296,600) × 3] = 2.46 days

59.

High Brow Express deals strictly with two customers. The average amount each customer pays per month along with the collection delay associated with each payment is shown below. Given this information, what is the weighted average delay? Assume that every month has 30 days.        A.  1.79 days B.  1.84 days C.  2.00 days D.  2.07 days E.  2.55 days Total monthly collections = $478,000 + $575,000 = $1,053,000 Weighted average delay = [($478,000/$1,053,000) × 2] + [($575,000/$1,053,000) × 3] = 2.55 days

Hoyes Lumber generally receives 3 checks a month. The check amounts and the collection delay for each check

Hoyes Lumber generally receives 3 checks a month. The check amounts and the collection delay for each check are shown below. Given this information, what is the amount of the average daily float? Assume each month has 30 days.        A.  $1,386.67 B.  $1,407.19 C.  $4,750.00 D.  $6,833.33 E.  $6,933.33 Average daily float = [($6,100 × 3) + ($5,500 × 1) + ($8,900 × 2)]/30 = $1,386.67

53.

The Blue Star generally receives only 3 checks a month. The check amounts and the collection delay for each check are shown below. Given this information, what is the amount of the average daily float? Assume every month has 30 days.        A.  $971.43 B.  $1,376.67 C.  $3,351.33 D.  $5,666.67 E.  $6,800.00 Average daily float = [($8,800 × 2) + ($2,300 × 3) + ($8,400 × 2]/30 = $1,376.67

54.

The Food Wholesaler generally receives 4 checks a month. The check amounts and the collection delay for each check are shown below. Given this information, what is the amount of the average daily float? Assume every month has 30 days.        A.  $3,963.89 B.  $21,750.00 C.  $22,236.67 D.  $28,133.33 E.  $35,675.00 Average daily float = [($67,200 × 3) + ($91,600 × 1) + ($54,200 × 2) + ($88,500 × 3)]/30 = $22,236.67

55.

Hot Tub Builders sells to three retail outlets. Each retailer pays once a month in the amounts shown below. The collection delay associated with each payment is also given below. What is the amount of the average daily receipts if you assume each month has 30 days?        A.  $2,389.70 B.  $8,513.33 C.  $14,608.13 D.  $23,896.97 E.  $81,900.00 Average daily receipts = ($42,500 + $149,800 + $63,100)/30 = $8,513.33