Slimware is considering establishing a zero-balance system for its payroll account. Currently, the firm pays its hourly employees every week on late Friday afternoon and puts a check for $750,000 in the bank to cover the payroll each Monday morning. Slimware has determined that the checks clear its bank as follows: ? $$\begin{array} { l c }
\text { Day } & \text { Percent clearing } \
\text { Monday } & 26 \% \
\text { Tuesday } & 51 \% \
\text { Wednesday } & 14 \% \
\text { Thursday } & 7 \% \
\text { Friday } & 2 \%
\end{array}$$ ?
What is the annual pretax return to Slimware if the firm can earn 9% on any funds released from employing the zero-balance system? Assume the company has 52 weekly pay periods each year.

Question

Slimware is considering establishing a zero-balance system for its payroll account. Currently, the firm pays its hourly employees every week on late Friday afternoon and puts a check for $750,000 in the bank to cover the payroll each Monday morning. Slimware has determined that the checks clear its bank as follows: ? $$\begin{array} { l c } 
\text { Day } & \text { Percent clearing } \
\text { Monday } & 26 \% \
\text { Tuesday } & 51 \% \
\text { Wednesday } & 14 \% \
\text { Thursday } & 7 \% \
\text { Friday } & 2 \%
\end{array}$$ ?
What is the annual pretax return to Slimware if the firm can earn 9% on any funds released from employing the zero-balance system? Assume the company has 52 weekly pay periods each year.

Quizplus · Accepted Answer

The Answer of Slimware is considering establishing a zero-balance system for its payroll account. Currently, the firm pays its hourly employees every week on late Friday afternoon and puts a check for $750,000 in the bank to cover the payroll each Monday morning. Slimware has determined that the checks clear its bank as follows: ? $$\begin{array} { l c } 
\text { Day } & \text { Percent clearing } \
\text { Monday } & 26 \% \
\text { Tuesday } & 51 \% \
\text { Wednesday } & 14 \% \
\text { Thursday } & 7 \% \
\text { Friday } & 2 \%
\end{array}$$ ?
What is the annual pretax return to Slimware if the firm can earn 9% on any funds released from employing the zero-balance system? Assume the company has 52 weekly pay periods each year.

Slimware Is Considering Establishing a Zero-Balance System for Its Payroll