A mail-order firm processes 6,300 checks per month. Of these, 70 percent are for $53 and 30 percent arefor $85. The $53 checks are delayed two days on average; the $85 checks are delayed three days onaverage. Assume 30 days in a month.a-1 What is the average daily collection float?Average daily collection float$a-2 How do you interpret your answer?On average, there is $|| that is (Click to select) ▪ and (Click to select)to the firm.b-1 What is the weighted average delay? (Round your answer to 2 decimal places. (e.g., 32.16))Weighted average delaydaysb-2 Calculate the average daily float.Average daily floatc. How much should the fim be willing to pay to eliminate the float?Maximum paymentd. If the interest rate is 6 percent per year, calculate the daily cost of the float. (Use 365 days a year. Donot round intermediate calculations and round your final answer to 2 decimal places. (e.g.,32.16))Daily cost of the floate. How much should the fim be willing to pay to reduce the weighted average float to 2.0 days?Maximum payment

Hello, since the student has posted multiple requirements, only the first three are answerable.…

Answered: A mail-order firm processes 6,300…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 9P

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Rosita Flores owns Rositas Mexican Restaurant in Tempe, Arizona. Rositas is an affordable restaurant near campus and several hotels. Rosita accepts cash and checks. Checks are deposited immediately. The bank charges 0.50 per check; the amount per check averages 75. Bad checks that Rosita cannot collect make up 3 percent of check revenue. During a typical month, Rositas has sales of 45,000. About 80 percent are cash sales. Estimated sales for the next three months are as follows: Required: Prepare a schedule of cash receipts for May and June. (Round all amounts to the nearest dollar.)
My Aunts Closet Store collects 60% of its accounts receivable in the month of sale and 35% in the month after the sale. Given the following sales, how much cash will be collected in March?
Your neighbor goes to the post office once a month and picks up two checks, one for $13,000 and one for $3,000. The larger check takes 2 days to clear after it is deposited; the smaller one takes 4 days. Assume 30 days per month. 1. What is the total float for the month? 2. What is the average daily float? 3a. What is the average daily receipts? 3b. What is the weighted average delay?
In a typical month, the Monk Corporation receives 80 checks totaling $131,000. These are delayed four days on average. What is the average daily float? Assume 30 days in a month.
Murkywater Company is considering a lockbox system. Its collection delay is currently 12 days. Reduction in mailing time = 1.5 day Reduction in clearing time = 1.5 day Reduction in firm processing time = 1.0 day Total = 4.0 days The following is also known: Daily interest on Treasury bills = 0.025% Average number of daily payments to lockboxes = 4,000 Average size of payment = $400 A local bank has agreed to operate this lockbox system for a fee of $0.25 per check processed. What are Murkywater’s average daily collections? Multiple Choice $1,600,000 $1,200,000 $1,000,000 $1,800,000 $1,400,000
Murkywater Company is considering a lockbox system. Its collection delay is currently 12 days. Reduction in mailing time = 1.5 day Reduction in clearing time = 1.5 day Reduction in firm processing time = 1.0 day Total = 4.0 days The following is also known: Daily interest on Treasury bills = 0.025% Average number of daily payments to lockboxes = 4,000 Average size of payment = $400 A local bank has agreed to operate this lockbox system for a fee of $0.25 per check processed. What are the costs associated with the proposal?
Murkywater Company is considering a lockbox system. Its collection delay is currently 12 days. Reduction in mailing time = 1.5 day Reduction in clearing time = 1.5 day Reduction in firm processing time = 1.0 day Total = 4.0 days The following is also known: Daily interest on Treasury bills = 0.025% Average number of daily payments to lockboxes = 4,000 Average size of payment = $400 A local bank has agreed to operate this lockbox system for a fee of $0.25 per check processed. What are the costs associated with the proposal? Multiple Choice $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000
Bulldogs Inc. is a retail mail order firm that currently uses a centralized collection system that requires all checks to be sent to its flotation headquarters. An average of 6 days is required for mailed checks to be received, 3 days for Bulldogs Inc. to process them, and 2 days for the checks to clear through its bank. A proposed lockbox system would decrease the mailing and processing time to 2 days and the check clearing time for 1 day. Bulldogs Inc. has an average daily collection of P250,000. If Bulldogs Inc. adopts this proposed lockbox system, its average cash balance will increase by A. P750,000 B. P1,200,000 C. P2,000,000 D. P450,000
Bulldogs Inc. is a retail mail order firm that currently uses a centralized collection system that requires all checks to be sent to its flotation headquarters. An average of 6 days is required for mailed checks to be received, 3 days for Bulldogs Inc. to process them, and 2 days for the checks to clear through its bank. A proposed lockbox system would decrease the mailing and processing time to 2 days and the check clearing time for 1 day. Bulldogs Inc. has an average daily collection of P250,000. If Bulldogs Inc. adopts this proposed lockbox system, its average cash balance will increase by?
Checking accounts at a local bank carry an average balance of $30,000. Money stays in the checking accounts for 2 months on average. How many dollars flow through the bank each month on average? (There are twelve months a year.) Group of answer choices $200,000/month $180,000/month $25,000/month $15,000/month $10,000/month
A company receives three check per month. Each is for $25,000. The number of days float on the first is 9 days. On the second, 6 days. On the third, 3 days. What is the weighted average delay?
The company has the following expected pattern of collections on credit sales 70 percent collected in the month of sale, 15 percent in the month after the month of sale, and 14 percent in the second month after the month of sale. The remaining 1 percent is never collected. At the end of May, the company has the following accounts receivable balances From April sales P21.00 From May sales P48.000 The company's expected sales for June are P150,000. How much cash will the company to collect in June?

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