Question: A mail - order firm processes 5 , 8 0 0 cheques per day. Of these, 6 0 percent are for 4 9 and 4
A mailorder firm processes cheques per day. Of these, percent are for and percent are for The cheques are delayed two days on average; the cheques are delayed three days on average. Assume days in a month. a What is the average daily collection float? How do you interpret your answer? b What is the weighted average delay? Use the result to calculate the average daily float. c How much should the firm be willing to pay to eliminate the float? d If the interest rate is percent per year, calculate the daily cost of the float. e How much should the firm be willing to pay to reduce the weighted average float by days?
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