Each month,your company typically has $1,000,000 and $2,000,000 in remittances with collection floats of 5 and 7 days,respectively.On average,your company's collection float is:

Question

Quizplus · Accepted Answer

To calculate the average collection float, we can use the formula: 
(Collection float * Remittance amount) / Total remittance amount

The calculation for the first remittance of $1,000,000 with a collection float of 5 days would be:
(5 * $1,000,000) / $3,000,000 = 1.67 days

The calculation for the second remittance of $2,000,000 with a collection float of 7 days would be:
(7 * $2,000,000) / $3,000,000 = 4.67 days

Adding these two results gives us a total of 6.34 days. 
Rounding to the nearest hundredth gives us 6.33 days, which is the option closest to the calculated value.

Each Month,your Company Typically Has $1,000,000 and $2,000,000 in Remittances