Each business day, on average, a company writes checks totaling $39,000 to pay its suppliers. The usual clearing time for the checks is three days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $50,000. The cash from the payments is available to the firm after two days. a. Calculate the company's disbursement float, collection float, and net float. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) b. Calculate the company's disbursement float, collection float, and net float, if the collected funds were available in one day instead of two. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

Each business day, on average, a company writes checks totaling $39,000 to pay its suppliers. The usual clearing time for the checks is three days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $50,000. The cash from the payments is available to the firm after two days. a. Calculate the company's disbursement float, collection float, and net float. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) b. Calculate the company's disbursement float, collection float, and net float, if the collected funds were available in one day instead of two. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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