During a normal month, Cunningham's Lumber receives a total of 8 checks with a total value of $546,000. 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 using the following formula:

Average daily float = Total float / Number of days

Where,
Total float = Value of checks deposited but not yet available
Number of days = Time taken for the checks to become available

Total float = $546,000
Number of days = 30 - 1 = 29

Therefore, average daily float = $546,000 / 29 = $18,827.59 ≈ $18,200 (rounded to the nearest dollar)

Hence, the best choice is A) $18,200.

During a Normal Month, Cunningham's Lumber Receives a Total of 8