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3 years ago

7

Each business day, on average, a firm writes checks totaling $17000 to pay its suppliers. The usual clearing time for the checks

is 4 days. Meanwhile, the firm is receiving payments from its customers each day, in the forms of checks, totaling $22000. The cash from the payments is available to the firm after two days. What is the firm’s disbursement float, collection float, and net float?

1 answer:

BaLLatris [955]3 years ago

7 0

Answer:

The disbursement float is $ 68,000, collection float is -$44,000 and net float is $24,000.

Explanation:

DISBURSEMENT FLOAT -

Formula that can be used to calculate the disbursement float is =

Amount of average monthly check written X Average number of days it

takes to clear check

Where, amount of average monthly check = $17,000

and average number of days for it to be cleared = 4 days

Disbursement float = $17,000 x 4

= $68,000

COLLECTION FLOAT -

Formula that can be used to calculate the collection float is =

Amount of average monthly check received X Average number of days it

takes to clear check

Where, amount of average monthly check =-$22,000

and average number of days for it to be cleared = 2 days

Collection float = -$22,000 x 2

= -$44,000

NET FLOAT -

Formula that can be used to calculate the NET float is =

DISBURSEMENT FLOAT - COLLECTION FLOAT

= $68,000 - $44,000

= $24,000

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Answer:

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Explanation:

According to the scenario, the given data are as follows:

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So, we can calculate the net cash provided by company's financing activities by using following formula:

So, first we analyze Cash flow after operating activities, then

Cash flow (after operating activities ) = Beginning cash flow + Operating activities generated

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Given that closing cash balance = $50,000

So, Net cash provided = $400,000 + $50,000

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Answer:

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Chris has three options for settling an insurance claim. Option A will provide $1,500 a month for 6 years. Option B will pay $1,

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Answer:

<u><em>Option B. $1,025 a month for 10 years.</em></u>

Explanation:

Calculate the present value of each option:

$\text{Monthly rate: } 6.8\%/12 = 0.068/12 = 0.005\overline 6$

Formula:

$PV=C\times \bigg[\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}\bigg]$

Where:

PV is the present value of the constant monthly payments
r is the monthly rate
t is the number of moths

<u>1. Option A will provide $1,500 a month for 6 years. </u>

$PV=$\ 1,500\times \bigg[\dfrac{1}{(0.005\overline 6}-\dfrac{1}{0.005\overline 6(1+0.005\overline 6)^{(6\times12)}}\bigg]$

$PV=\$ 88,479.23$

<u>2. Option B will pay $1,025 a month for 10 years. </u>

$PV=$\ 1,025\times \bigg[\dfrac{1}{(0.005\overline 6}-\dfrac{1}{0.005\overline 6(1+0.005\overline 6)^{(10\times12)}}\bigg]$

$PV=\$ 89,068.22$

<u>3. Option C offers $85,000 as a lump sum payment today. </u>

<u></u>

PV = $85,000

<h2 /><h2> Conclusion:</h2>

The present value of the<em> option B, $1,025 a month for 10 years</em>, has a the greatest present value, thus since he is only concerned with the <em>financial aspects of the offier</em>, this is the one he should select.

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Answer:

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Answer:

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Explanation:

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Now, to find the amount of last annual dividend paid.

Let the amount of last annual dividend paid be $l.$

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Rate of return ( $r$ ) = $12.2\%.$

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Now, to get the amount of last dividend paid we put formula:

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<em>Multiplying both sides by 0.104 we get:</em>

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<em>Dividing both sides by 1.018 we get:</em>

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Therefore, the amount of the last annual dividend paid is $4.3.

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