Your neighbor goes to the post office once a month and picks up two checks, one for $ 17,000 and one for $2,000. The larger check takes 4 days to clear after it is deposited; the smaller one takes 6 days. Assume 30 days in a month. a. What is the total float for the month? b. What is the average daily float? c-1. What are the average daily receipts? c-2. What is the weighted average delay?

Your neighbor goes to the post office once a month and picks up two checks, one for $ 17,000 and one for $2,000. The larger check takes 4 days to clear after it is deposited; the smaller one takes 6 days. Assume 30 days in a month. a. What is the total float for the month? b. What is the average daily float? c-1. What are the average daily receipts? c-2. What is the weighted average delay?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 20E: Rosita Flores owns Rositas Mexican Restaurant in Tempe, Arizona. Rositas is an affordable restaurant...

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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.)
During a normal month, Jank's receives a total of nine checks with a total value of $237,400. 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?
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.
You want to open a checking account with a $500 deposit. You estimate you will write 16 checks a month and use an ATM from other banks about twice a week. Bank A charges $1.40 per check if you drop under a minimum balance of $100, but you can use another bank’s ATM without a fee. Bank B has free checking but charges $1.40 each time you use another bank’s ATM. Calculate the difference in fees between the two banks over the course of a year for the following scenarios. a. your balance slips below $100 every month b. Your balance slips below $100 every other month, but you are now able to pay a bill online each month, dropping the number of checks you have to write to fifteen monthly. You also find you are only using the other bank’s ATM about once a week. c. You maintain a minimum balance of $500, write nine checks a week, and use another bank’s ATM only about once a month.
What is the annual cost of a checking account with a monthly fee of $7.50 and a processing fee of $0.25 per check if you write an average of 2 checks per month?
You are looking for a bank in which to open a checking account for your new part-time business. You estimate that in the first year, you will be writing 30 checks per month and will make three debit transactions per month. Your average daily balance is estimated to be $900 for the first six months and $2,400 for the next six months. Use the following information to solve the problem. Bank Monthly Fees and Conditions Bank 1 $16.00 with $1,000 min. daily balance-or-$25.00 under $1,000 min. daily balance Bank 2 $4.50 plus $0.40 per check over 10 checks monthly$1.00 per debit transaction Bank 3 $5 plus $0.25 per check$2.00 per debit transaction Bank 4 $8 plus $0.15 per check$1.50 per debit transaction (a) Calculate the cost (in $) of doing business with each bank for a year. Bank 1 Bank 2 Bank 3 Bank 4 (b) Which bank should you choose for your checking account? Bank 1 Bank 2 Bank 3 Bank 4
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 $42.00
What would be the net annual cost of thefollowing checking accounts? a. Monthly fee, $3.75; processing fee, 25cents per check; checks written, anaverage of 14 a month. b. Interest earnings of 4 percent with a$500 minimum balance; average monthlybalance, $600; monthly service charge of$15 for falling below the minimumbalance, which occurs three times a year(no interest earned in these months).
What would be the net annual cost of the following checking accounts? Monthly fee, $3.75; processing fee, 25 cents per check; checks written, an average of 14 a month. Interest earnings of 4 percent with a $500 minimum balance; average monthly balance, $600; monthly service charge of $15 for falling below the minimum balance, which occurs three times a year (no interest earned in these months).
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?
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?
What is would be the net annual cost of the following account? a. Montly fee,$3.75, processing fee,25 cents per check; checks written,an average of 14 month.( input the amount as a positive value)