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Ch_19_20_Inclass_Exercises_Solutions

# Ch_19_20_Inclass_Exercises_Solutions - Ch 19 20 Inclass...

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1 Ch 19 / 20 Inclass Exercises Solutions Ch 19 1. What is the difference between disbursement float and collection float? Disbursement float Generated when a firm writes checks Available balance at bank > book balance Collection float Checks received increase book balance before the bank credits the account Available balance at bank < book balance Always negative 2. Suppose a firm receives two checks each month, the first check is for \$5,000 with a delay of 9 days, the second check is for \$3,000 with a delay of 5 days. Total receipts = _____________ Average daily receipts = ______________ Total Float = _______________ Average daily float = _____________ Weighted Average Delay = _____________ Ch# Delay (days) Ck Amount Float 1 9 5,000 45,000 2 5 3,000 15,000 3 0 0 0 4 0 0 0 14 8,000 60,000 8,000 266.67 60,000 2,000.00 7.50 Weighted Average Delay Float calculation for one month (30 days) Total Receipts Average Daily Receipts Total Float Average Daily Float

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2 Suppose the average daily float is \$3 million with a weighted average delay of 5 days. 3. What is the total amount unavailable to earn interest?
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