Question: How do I calculate the collection float? Each business day, on average, a company writes checks totaling $13,200 to pay its suppliers. The usual clearing

Each business day, on average, a company writes checks totaling $13,200 to pay its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $24,200. The cash from the payments is available to the firm after two days. a. Calculate the company's disbursement float, collection float, and net float. (A negative answer should be indicated by a minus sign.) Answer is complete but not entirely correct. $ Disbursement float Collection float $ $ 52,800 48,400 x 4,400 Net float b. If the collected funds were available in one day instead of two, what would be the company's disbursement float, collection float, and net float? (A negative answer should be indicated by a minus sign.) Answer is complete but not entirely correct. Disbursement float $ Collection float $ 52,800 24 200 28,600 Net float IS
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
