Your average customer is located 3 mailing days away from your firm. In addition, it takes 1 day for your funds to be available for use once you have made your bank deposit. You have determined that your total collection time is 8 days. How long on average is it taking your firm to process the payments from your customers?

Question

Quizplus · Accepted Answer

The total collection time is the sum of the mailing time, processing time, and the time it takes for funds to be available. Given a total collection time of 8 days, a mailing time of 3 days, and 1 day for funds to be available, the processing time is calculated as 8 - 3 - 1 = 4 days.

Your Average Customer Is Located 3 Mailing Days Away from Your