Assume a check for $127,000 has a collection delay of 1.8 days while a check for $218,900 has a collection delay of 1.5 days. If these are the only two checks received in a 30-day period, what is the weighted average delay?

Question

Quizplus · Accepted Answer

Weighted average delay can be calculated as follows:

Weighted Average Delay = (Delay of check 1 x Amount of check 1 + Delay of check 2 x Amount of check 2) / Total amount

Total amount = $127,000 + $218,900 = $345,900

Weighted Average Delay = (1.8 x $127,000 + 1.5 x $218,900) / $345,900 = 1.61 days.

Therefore, the weighted average delay is 1.61 days, which is closest to option B.

Assume a Check for $127,000 Has a Collection Delay of 1.8