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 collection float?

Question

Quizplus · Accepted Answer

The collection float is the difference between the amount of checks written and the amount of checks received, multiplied by the number of days it takes for the checks to clear. In this case, the collection float is ($1,500 * 7) - ($1,800 * 4) = -$7,200.

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