Purple Feet Wine, Inc., receives an average of $17,500 in checks per day. The delay in clearing

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Purple Feet Wine, Inc., receives an average of $17,500 in checks per day. The delay in clearing is typically three days. The current interest rate is .017 percent per day.

a. What is the company’s float?

b. What is the most the company should be willing to pay today to eliminate its float entirely?

c. What is the highest daily fee the company should be willing to pay to eliminate its float entirely?

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Fundamentals of Corporate Finance

ISBN: 978-1260153590

12th edition

Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan

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Question Posted: Jul 17, 2019 11:57 AM

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Purple Feet Wine, Inc., receives an average of $17,500 in checks per day. The delay in clearing

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a The collection float is the average daily value of checks received times the average ...View the full answer

Fundamentals of Corporate Finance

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