Dick's Automotive Parts receives an average of 130 cheques per day, totaling $4,800. It normally takes three days for these cheques to be deposited and clear the bank. On a typical day, Dick's
Writes cheques totaling $1,500. These cheques normally clear in ﬁve days. What is the amount of
The net ﬂoat?

Question

Quizplus · Accepted Answer

- The total amount of incoming cheques for three days is 130 x $4,800 = $624,000
- The net float for incoming cheques is the average amount of cheques in the process of clearing, which is half of the deposit time. Therefore, the net float for incoming cheques is 3/2 = 1.5 days.
- So, the net float for incoming cheques is $624,000 x (1.5/365) = $2,568
- The net float for outgoing cheques is the product of the amount of outgoing cheques and the time until they clear. Therefore, the net float for outgoing cheques is $1,500 x 5 = $7,500
- The net float is the difference between the incoming and outgoing net floats. Therefore, the net float is -$7,500 + $2,568 = -$6,932, which is closest to option B (-$6,900).

Dick's Automotive Parts Receives an Average of 130 Cheques Per