Larry Imports writes three checks a day for an average amount of $11,500 each.These checks generally clear the bank 2.1 days after they are written.In addition, the firm generally receives and deposits checks amounting to $19,500 each day.All deposits are available the next day.What is the firm's net float?
A)Net collection float of $19,500
B)Net collection float of $52,950
C)Net collection float of $91,950
D)Net disbursement float of $52,950
E)Net disbursement float of $91,950

Question

Quizplus · Accepted Answer

The firm's disbursement float is $11,500 * 3 checks * 2.1 days = $72,450. The collection float is $19,500 * 1 day = $19,500. The net float is $72,450 - $19,500 = $52,950, which is a net disbursement float.

Larry Imports Writes Three Checks a Day for an Average