Question

Freedom Wine receives an average of $684,006 in checks per day. The delay in clearing is typically 1.3 days. The current interest rate is .024 percent per day. Assume each month has 30 days.

What is the highest daily fee the company should be willing to pay to eliminate its float entirely?

Answer 1

Answer:

$213.40

Explanation:

Freedom Wine

Maximum daily fee =

(Received average in check per day × delay in clearing days) × Current interest rate percent per day

Maximum daily fee = ($684,006 ×1.3) × 0.00024

=$889,207.8×0.00024

= $213.40

Therefore the highest daily fee the company should be willing to pay to eliminate its float entirely will be $213.40