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

From the given information, we know that the total collection time is 8 days. This includes 3 days for mailing, 1 day for funds to become available, and the remaining time for processing the payments.

Therefore, the time taken by the firm to process payments would be:

Total Collection Time - Mailing Time - Fund Availability Time

= 8 days - 3 days - 1 day

= 4 days

Hence, the best choice is C) 4 days.

Your Average Customer Is Located 3 Mailing Days Away from Your