Question

Your neighbor goes to the post office once a month and picks up two checks, one for $14,300 and one for $5,300. The larger check takes four days to clear after it is deposited; the smaller one takes three days. Assume 30 days in a month. a. What is the total float for the month? b. What is the average daily float? (Round your answer to 2 decimal places, e.g.. 32.16.) c-1. What are the average daily receipts? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c-2. What is the welghted average delay? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Total float Average daily float Average daily receipts Weighted average delay 0-1. C-2. days

Answer 1

A. Total float = smaller check amount × smaller check delay + larger check amount × larger check delay

Total float = 5300× 3 + 14300× 4= 15900 + 57200

Total float= 73100

B. Average daily float = total float / number days in a month

Average daily float=73100/ 30= 2436.67

C1. Average daily receipt =( larger check amount + smaller check amount) / number of days in a month

Or Average daily receipt = total receipt / number days in a month

Average daily receipt= 14300+5300/30= 19600/30

Average daily receipt= 653.33

C2. Average delay= larger check delay ( larger check amount / total receipt ) + smaller check delay ( smaller check amount / total receipt)

Total receipt= smaller check amount + larger check amount

Total receipt= 5300+14300 = 19600

Average delay= 4 (14300/19600) + 3(5300/19600)= 2.92+0.0081

Average delay = 3.73