No More Pencils, Incorporated, disburses checks every 2 weeks that average $55,000 and take 8 days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays 0.02 percent per day for these 8 days? Ignore the effects of compounding interest.
Q: Receivables and Cash: Collection Float A firm has daily cash receipts through checks. On average 150…
A: Average cash balance is the amount of working capital available with the firm at the end of each…
Q: Green Valley Bank sent Comstock Industries their end of month bank statement for July. The end of…
A: Bank reconciliation is the process of comparing bank statement with books of records to detect…
Q: First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City…
A: Compound interest is the additional interest earned on the reinvested amount. It is interest on…
Q: A firm has daily cash receipts through checks. On average 150 checks are received per day while each…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: effective annual return on its consumer loans of 18.2 percent per year. The bank uses daily…
A: An investor earns interest on the amount invested. It is a fee paid to the investor for depositing…
Q: Each business day, on average, a company writes checks totaling $35,000 to pay its suppliers. The…
A: Disbursement float is the delay of time between of writting the check and reduction in the amount in…
Q: How much in Php will be in Ligaya's BDO account after the end of the last 6 years?
A: Future Value (Continuous Compounding) = Principal x e^(i x t) Here, i = Interest Rate t = Time in…
Q: First City Bank pays 7.5 percent simple interest on its savings account balances, whereas Second…
A: First City Bank Interest Rate = 7.5% Simple Interest Rate Second City Bank Interest Rate = 7.5%…
Q: Each business day, on average, a company writes checks totaling $34,500 to pay its suppliers. The…
A: The net float refers to the difference of collection float and disbursement float
Q: On a typical day, a company writes 48 checks worth a total of $8,925 that clear in 3 days. The…
A: given, write check = $8925 clear days = 3 collects check = $9940 clear days = 2.5 days
Q: in the month of May, Kayak Company Inc. wrote checks in the amount of $81,000. In June, checks in…
A: The outstanding checks refers to the checks written by the company but not presented to bank for…
Q: If the bank is paying 6% interest compounded daily at 360 days a year, how many periods will there…
A: The greater is the number of compounding periods the higher is the interest received on the…
Q: Receivables and Cash: Collection Float A firm has daily cash receipts through checks. On average 150…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Each business day, on average, a company writes checks totaling $36,500 to pay its suppliers. The…
A: CHECKS WRITES TOTAL = $36500 CHECKS CLEARING TIME = 5 DAYS RECEIVING PAYMENT EACH DAYS =$ 47500 THE…
Q: National Company writes checks averaging P12,000 a day, and it takes seven days for these checks to…
A: Net Float for a firm refers to the deviation that occurs between the book balances and actual…
Q: firm a recieves an average of 1000 checks a day. the average check amount is 400. the collection…
A: A lockbox system is an arrangement in which a bank-operated mailing address is provided by banks to…
Q: Sherman's Sherbet currently takes about 6 days to collect and deposit checks from customers. A…
A:
Q: Each business day, on average, a company writes checks totaling $37,500 to pay its suppliers. The…
A: A. Disbursement float=check written×number of days to clear=$37500×6=$225,000 collection float=check…
Q: What is the amount of outstanding checks at the end of November? At the end of December?
A: Outstanding checks: The checks which are written but not presented for the payment in the bank are…
Q: First National Bank requires a minimum balance of $1000 on its interest-earning checking accounts.…
A: Opportunity Cost refers to the potential benefit foregone when choosing one alternative over…
Q: oration receives checks that amount to P400,000 each day, whereas the amount of checks the company…
A: Net float is difference of amount to be received and amount to be paid considering check clearing…
Q: In the month of November, Bramble Company Inc. wrote checks in the amount of $10,200. In December,…
A: Outstanding checks: Checks written but not presented for the payment in the bank are called…
Q: Theta Corporation receives checks from its customers. The total check value averages P700,000 each…
A: Benefit or cost to be calculated on yearly basis, which means we have now received early and we can…
Q: General Products writes checks that average $33,000 daily. These checks take an average of 6 days to…
A: Data given: Average payments received daily = $35,000 Float time = 3 days Float time is the time…
Q: Each business day, on average, a company writes checks totaling $30,000 to pay its suppliers. The…
A: Answer a)
Q: You want to withdraw $ 21,769 from your account at the end of one year and $ 34,587 at the end of…
A: As per the given information: Withdrawals at the end of the one year - $21,769 Withdrawals at the…
Q: ugh checks. On average 150 checks are received per day while each check has an average value of…
A: Given: On average 150 checks are received per day while each check has an average value of P2,500.…
Q: Some time ago, you put £500 into a bank account for a "rainy day." Since then, the bank has been…
A: In this case, we have to use the Compound interest formula or future value formula.
Q: Ted's Toys just reconciled its bank account and has $12,300 in outstanding deposits and $31,400 in…
A: The correct option is: A. The firm has disbursements float but no collection float. As the firm has…
Q: f the bank is paying 12% interest compounded semiannually, how much must you deposit today in your…
A: The Present Value of a one-time deposit: The Present Value of a one-time deposit refers to the…
Q: What would be the net annual cost of the following checking accounts? a. Monthly fee, $2.75;…
A: Calculation of net annual cost for both case are as follows.
Q: Barcain Credit Corporation wants to earn an effective annual return on its consumer loans of 16…
A: Formula for effective interest rate can be used to compute stated interest rate as: r = (1+i/n) n –…
Q: Which of the following bank accounts has the lowest effective annual return? Group of answer choices…
A: Compound interest: The compound interest refers to the amount of interest gained or acquired for…
Q: A firm has daily cash receipts through checks. On average 150 checks are received per day while each…
A: 19. Total annual Interest on free cash = P 22,500 20. The annual cost of services = P 6,000 21.…
Q: Bank A pays 2% interest compoundedannually on deposits, while Bank B pays 1.75% compounded daily.a.…
A: Formula for EFF is: EFF = (1+r/n)^n - 1 where r is the nominal rate of interest & n is the…
Q: Each business day, on average, a company writes checks totaling $41,000 to pay its suppliers. The…
A: Writes checks Total = $41000 Checks clearing Time = 3 days Company receiving from customer = $52000…
Q: A firm has daily cash receipts through checks. On average 150 checks are received per day while each…
A: Given Number of checks per day 150 Value of each check 2500 bank has offered to…
Q: Company Deli writes checks averaging P30,000 per day that require 4 days to clear. By what amount…
A: Let us assume that the company has just started the operations. Now company would be wrriting…
Q: r firm processes 50,000 checks each year with an average face value of $50 per check. Collecting on…
A: We need to compute opportunity cost of funds blocked for total no. of float days $ 4%.
Q: Now suppose that BSB's largest depositor withdraws $10,000,000 from her account one day. On paper,…
A: Given: Assets Amount Liabilities Amount Reserve 20 million Deposits 200 million Loans 180…
Q: rovident Manufacturing recently began paying all of its invoices within 20 days of receipt, rather…
A: The amounts that are liable to be paid in short period of time (say, one year) are classified as…
Q: Each business day, on average, a company writes checks totaling $37,000 to pay its suppliers. The…
A: Here, Total Written Checks is $37,000 Clearing time for written checks is 3 days Total amount of…
Q: On an average day, GDF Corp. receives $7,218 in checks from customers. These checks clear the bank…
A: Given: Checks from customers = $7,218 Average days = 1.6 Daily interest rate = 0.028 Number of days…
Q: If the bank is paying 8% interest compounded quarterly, how many periods will there be in a…
A: The greater the number of compounding periods the higher is the interest received on the investment.
No More Pencils, Incorporated, disburses checks every 2 weeks that average $55,000 and take 8 days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays 0.02 percent per day for these 8 days? Ignore the effects of compounding interest. |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- On an average day, Town Center Hardware receives $2,420 in checks from customers. These checks clear the bank in an average of 2.1 days. The applicable daily interest rate is 0.025 percent. What is the maximum amount this store should pay to completely eliminate its collection float? Assume each month has 30 days.When he became the president of Jem Incorporated, John Smith changed the date of the weekly payday from the end of the day on Monday to the end of the day on Friday. The company has a weekly payroll of $10 million, and the cost of short-term funds was 13%. If this change delayed check clearing by 1 week, what annual savings were realized? Use the information below for the next two problems. Schlitz Inc. has obtained a 90-day bank loan of $10,000 with an annual interest rate of 15%, payable at maturity. Assume a 365-day year.If the bank is paying 12% interest compounded semiannually, how much must you deposit today in your account if you wish to have $18,000 at the end of two years? (Use a number, 2 decimal values, no commas, no space, no unit of measurement) If the bank is paying 4% interest compounded every 4 months, how many periods will there be in a year?(Use whole number, no decimal value, no commas, no space, no unit of measurement)
- ABC Corporation receives checks from its customers. The total check value averages 700,000 each day. It takes an average of 5 days from deposits for these to clear the bank. If the bank offers to accelerate the 5-day clearing process to 3 days for a monthly fee of 600. If ABC can earn 4% investment income from excess cash, how much is the net annual benefits/cost of this bank offer?General Products writes checks that average $33,000 daily. These checks take an average of 6 days to clear. It receives payments that average $35,000 daily. It takes 3 days before these checks are available to the firm. What would be the annual savings if General Products could obtain access to the payments it receives within 2 days? The interest rate is 5% per year. (Do not round intermediate calculations.)A firm has no cash sales (all sales are on credit and are collected 28 days after the sale). If the receivables are $167,000, what is the level of sales? Assume there are 365 days in a year. Round your answer to the nearest dollar. $
- On an average day, GDF Corp. receives $7,218 in checks from customers. These checks clear the bank in an average of 1.6 days. The applicable daily interest rate is .028 percent. What is the present value of eliminating the float? Assume each month has 30 days.A firm has daily cash receipts through checks. On average 150 checks are received per day while each check has an averagevalue of P2,500. It takes an average of 3 days for the bank to clear the checks. A bank has offered to decrease the clearingperiod to one day for a monthly fee of P500. The bank gives an interest rate of 3% per year. 1. How much is the decrease of the clearing float in days? 2. How much is the annual cost of the service? 3. What is the annual net benefit or (loss) from having this service?On accepting the position of chief executive officer and chairman of Reeves Machinery, Frank Cheney changed the firm’s weekly payday from Monday afternoon to the following Friday afternoon. The firm’s weekly payroll was $10 million, and the cost of short-term funds was 13%. If the effect of this change was to delay check clearing by 1 week, what annual savings, if any, were realized? Format: 1,111,111
- Lowe and Price Co has annual credit sales of $12,000,000, and three months are allowed for payment. The company decides to offer a 2% discount for payments made within ten days of the invoice being sent, and to reduce the maximum time allowed for payment to two months. It is estimated that 50% of customers will take the discount. The company requires a 20% return on investments. Assume that the volume of sales will be unaffected by the discount. What is the reduction in accounts receivable? What is the opportunity income from the reduction in accounts receivable? What is the discount allowed each year? What is the net benefit of new discount policy each year?First National Bank requires a minimum balance of $1000 on its interest-earning checking accounts. Account holders are paid 1.50 percent on the average balance if the balance stays above the minimum all month. If you normally have an average balance of $2200, what is the annual opportunity cost of keeping the money in a First National checking account instead of a savings account that pays 3.50 percent? $44.00 $24.00 $33.00 $42.00It is the first day of the year and you plan to make a total of 5 deposits of $ 4, 000 each, one every 6 months with the first payment being made today. The bank pays a nominal interest rate of 15% but uses semiannual compounding. How much your account with the bank be if you leave the money in the bank to be withdrawn all in 12 years from today? Round to the nearest $0.01 but do not use the $ sign. DO NOT USE commas to separate thousands. For example if you obtain $1, 432.728 then enter 1433.73; if you obtain $432 then enter 432.00