Jane James owns an appliance store. She usually receives $50,000 worth ofappliances per month. She does not like to owe people money and alwayspays her bills on the day she receives the invoice. Someone told her thatif she delayed payment, she could actually increase her profit because themoney would be earning interest in her account. She went through her billsand found that she actually had an additional 10 days, on average, to payher invoices. She also found that she was earning 2 percent interest on themoney she had in her money market savings account.a. If she delayed payment by the 10 days, how much additional interest wouldshe earn for the year?b. Explain how this problem represents a disbursement float.
Jane James owns an appliance store. She usually receives $50,000 worth of
appliances per month. She does not like to owe people money and always
pays her bills on the day she receives the invoice. Someone told her that
if she delayed payment, she could actually increase her profit because the
money would be earning interest in her account. She went through her bills
and found that she actually had an additional 10 days, on average, to pay
her invoices. She also found that she was earning 2 percent interest on the
money she had in her
a. If she delayed payment by the 10 days, how much additional interest would
she earn for the year?
b. Explain how this problem represents a disbursement float.
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