Your ﬁrm has average daily receipts of €2,500.These receipts are available after 6 days on average.The interest rate that could be earned is .02% (.0002) per day.What is the approximate
Cost of the ﬂoat per day?

Question

Quizplus · Accepted Answer

The cost of float per day can be calculated as the product of the average daily receipts and the number of days it takes for the funds to become available, multiplied by the daily interest rate that could be earned.

Cost of float per day = €2,500 x 6 x 0.0002 = €3.00

Therefore, the best choice is B, as it is the only option that matches the calculated cost of float per day.

Your ﬁRm Has Average Daily Receipts of €2,500