Jumpdisk Company writes checks averaging R15,000 a day, and it takes 5 days for these checks to clear.The firm also receives checks in the amount of R17,000 per day, but the firm loses three days while its receipts are being deposited and cleared.What is the firm's net float in rands?

Question

Quizplus · Accepted Answer

To calculate the net float, we need to subtract the disbursement float (time between writing checks and them clearing) from the collection float (time between receiving checks and depositing them).

Disbursement float: R15,000/day x 5 days = R75,000 
Collection float: R17,000/day x 3 days = R51,000

Net float: R51,000 - R75,000 = -R24,000

The negative net float means that the company is actually losing money due to the time it takes for checks to clear.

Jumpdisk Company Writes Checks Averaging R15,000 a Day, and It