On an average day, a company writes checks totaling $1,500. These checks take 7 days to clear. The company receives checks totaling $1,800. These checks take 4 days to clear. The cost of debt is 9%. What is the firm's net float?

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Quizplus · Accepted Answer

The firm's net float is calculated as (Disbursement Float - Collection Float). Disbursement Float = $1,500 * 7 = $10,500. Collection Float = $1,800 * 4 = $7,200. Net Float = $10,500 - $7,200 = $3,300.

On an Average Day, a Company Writes Checks Totaling $1,500