A).On average, Hamlin collects $50,000 a day from patients and insurers.It takes 3 days for the receipts to be deposited and cleared.On average, Hamlin writes $45,000 of checks daily.It takes 5 days for the checks to be mailed, delivered, deposited and cleared by the bank.What is Hamlin's collections float, disbursement float and net float?Is the net float good float or bad float?

b).Hamlin has available an unused and significant line of credit with a local bank at an annual rate of interest of 5%.Hamlin has annual bills of $5,000,000 and pays them in 30 days; however, all vendors offer terms of 0.5/10, net 30.Should Hamlin be paying the bills in 10 days (support your answer)?

c).At the end of last year, Hamlin had accounts receivable of $1,500,000 and patient revenues for the year were $13,000,000.What is Hamlin's Average Collection Period?

Answer rating: 100% (QA)

Hamlins Float and Credit Decisions a Float Analysis Collections Float 50000day 3 days 150000 Disburs... View the full answer