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