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Jumpdisk Company writes checks averaging $32,000 a day and it takes five days for these checks...

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Finance

Jumpdisk Company writes checks averaging $32,000 a day and ittakes five days for these checks to clear. The firm also receiveschecks in the amount of $35,000 per day, but the firm loses fourdays while its receipts are being deposited and cleared. What isthe firm's net float in dollars?

Answer & Explanation Solved by verified expert
4.0 Ratings (538 Votes)

Disbursement Float = Average check written * Average number of days for checks to clear

                           = 32000* 5

                            = 160000

collection float =Average check received *Average number of days for checks to clear

                  = -35000* 4

                  = -140000

Net Float = Disbursement float +collection float

              = 160000+ (-140000)

              = 160000-140000

                = $ 20000
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Transcribed Image Text

Jumpdisk Company writes checks averaging $32,000 a day and ittakes five days for these checks to clear. The firm also receiveschecks in the amount of $35,000 per day, but the firm loses fourdays while its receipts are being deposited and cleared. What isthe firm's net float in dollars?

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