Jumpdisk Company writes checks averaging $15,000 a day, and it takes 5 days for these checks to clear. The firm also receives checks in the amount of $17,000 per day, but the firm loses three days while its receipts are being deposited and cleared. The firm's net float in dollars is:

Question

Quizplus · Accepted Answer

First, we need to calculate the disbursement float, which is the time difference between when a check is written and when it clears. In this case, it is 5 days for Jumpdisk Company's checks, so the disbursement float is $15,000 x 5 = $75,000.

Next, we need to calculate the collection float, which is the time difference between when a check is received and when it clears. In this case, the firm receives $17,000 per day, but loses 3 days while its receipts are being deposited and cleared, so the collection float is $17,000 x 3 = $51,000.

To find the net float, we subtract the collection float from the disbursement float: $75,000 - $51,000 = $24,000. Therefore, the firm's net float in dollars is $24,000.

Thus, the answer is D.

Jumpdisk Company Writes Checks Averaging $15,000 a Day, and It