Archer Arrow Company examined its cash management policy and found that it takes an average of 5 days for the checks that the company writes to reach its bank and thus be deducted from the checking account balance. On the other hand, it takes an average of 4 days from the time the company receives the checks from its customers until the fund becomes available for use at the bank. On the average, Archer writes a total of P70,000 per day and it receives from customers a total of P80,000 per day. Compute the disbursement float. Compute the collection float. Compute the net float.
Archer Arrow Company examined its cash management policy and found that it takes an average of 5 days for the checks that the company writes to reach its bank and thus be deducted from the checking account balance. On the other hand, it takes an average of 4 days from the time the company receives the checks from its customers until the fund becomes available for use at the bank. On the average, Archer writes a total of P70,000 per day and it receives from customers a total of P80,000 per day. Compute the disbursement float. Compute the collection float. Compute the net float.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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- Archer Arrow Company examined its cash management policy and found that it takes an average of 5 days for the checks that the company writes to reach its bank and thus be deducted from the checking account balance. On the other hand, it takes an average of 4 days from the time the company receives the checks from its customers until the fund becomes available for use at the bank. On the average, Archer writes a total of P70,000 per day and it receives from customers a total of P80,000 per day.
- Compute the disbursement float.
- Compute the collection float.
- Compute the net float.
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