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