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…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lockbox system. She forecasts that 220 payments a day will be made to lockboxes with an average payment size of $3,300. The bank’s charge for operating the lockboxes is $0.58 a check. Assume an interest rate of 8% and a 365-day year. What reduction in the time to collect and process each check is needed to justify use of the lockbox system? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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
Nelto deposits $2,500 in a bank account that pays 3% interest compounded quarterly. Two years later, how much do they have in their bank account? C 1 t=0 n Cash Flow Diagram ….....…... Time Value of Money (TVM) Framework PV PMT FV type How to compute using Excel? -function( rate, nper, pmt, [PV]. [type]) n CPT
Home Roasted Turkeys disburses checks every four weeks that average $70,000 and take five days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays .02 percent per day for these five days? Ignore the effects of compound interest. Assume one year has exactly 52 weeks. $36 $91 $182 $364 $910
Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 400 payments a day will be made to lock boxes with an average payment size of $3,000. The bank's charge for operating the lock boxes is $0.50 a check. The interest rate is 0.012% per day. a. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. Note: Do not round intermediate calculations. b. Is it worthwhile to adopt the system? c. What minimum reduction in the time to collect and process each check is needed to justify use of the lock-box system? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Net daily advantage b. Is it worthwhile to adopt the system? c. Minimum reduction in time $ Yes (56) 1.39 days
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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).
Suppose that the average daily balance on William's American Express Card is $382.2 for a 30-day billing cycle, the amount of the latest running balance on the card is $6941, and the bank charges 1.5% per month on the average daily balance. Determine each of the following. Round the amount to the nearest penny and express it in two decimal places. For example, 97.45, or 34.50, or 57.00. The finance charge for this billing cycle is $ The account balance on the next billing is $
Calculating the net costs of checking accounts. Determine the annual net cost of these checking accounts: a. Monthly fee $4, check-processing fee of 20 cents, average of 23 checks written per month. b. Annual interest of 1.5% paid if balance exceeds $750, $8 monthly fee if account falls between minimum balance, average monthly balance $815, account falls below $750 durng 4 months.
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E G H $4400 is deposited in a savings certificate at a bank at 3.5% interest. What is the effective interest rate if the money is compounded continuously? What is the effective interest rate if the money is compounded quarterly? Formatting Rules: ■Create organized tables with proper column and 0 row labeling 1 Graphs should have proper labeling for both axis 2 Formatting Rules: 13 14 Create organized tables with proper column and 15 row labeling 16 Graphs should have proper labeling for both axis 17 Formatting Rules: 18 19 Create organized tables with proper column and 20 row labeling 21 Graphs should have proper labeling for both axis 24 25 22222 L(Ctrl)

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