Purple Feet Wine, Inc., receives an average of $14,500 in checks per day. The delay in...
|
Purple Feet Wine, Inc., receives an average of $14,500 in checks per day. The delay in clearing is typically three days. The current interest rate is .017 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 | $ |
Homework Answers
a. Company's Float = Delay in Check Clearing * Average Amount
Company's Float = 3 * 14500
Company's Float = $43500
b. Maximum Payment = $43500
c. Maximum daily Charge = Float * Interest Rate
Maximum daily Charge = 43500 * 0.017%
Maximum daily Charge = $7.40
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