During a normal month,Flo's Flowers receives a total of nine checks with a total value of $168,000.On average,it takes 1 day from the date of deposit for the funds from these checks to be available to the firm.Assume each month has 30 days.What is the average daily float?

Question

Quizplus · Accepted Answer

The average daily float can be calculated by dividing the total amount of funds that are unavailable for use by the number of days it takes for the funds to become available. The total amount of the checks is $168,000 and it takes 1 day for the funds to become available. Therefore, the average daily float is $168,000/1 = $168,000 per day. However, we are asked for the average daily float, considering a normal month with 30 days. So, $168,000 should be divided by 30 to get the daily float which is $5,600 (rounded to the nearest dollar). Therefore, the best choice is (A) $5,600.

During a Normal Month,Flo's Flowers Receives a Total of Nine