Question

Your neighbor goes to the post office once a month and picks up two checks, one for $13,000 and one for$4,500. The larger check takes four days to clear after it is deposited; the smaller one takes three days. Use 30 days in a month.

a. What is the total float for the month?
b. What is the average daily float?
c. What are the average daily receipts and weighted average delay?

Answer 1

The total float for the month is 4 days. The average daily float is 0.133 days. The average daily receipts are $583.33 and the weighted average delay is $2,041.67.

Step-by-step explanation:

a. To calculate the total float for the month, we need to determine the longest time it takes for any of the checks to clear. In this case, the larger check takes 4 days to clear. So the total float for the month is 4 days.

b. The average daily float is calculated by dividing the total float by the number of days in a month. Since the total float is 4 days and there are 30 days in a month, the average daily float is 4/30 = 0.133 days.

c. The average daily receipts can be calculated by dividing the total amount of checks by the number of days in a month. In this case, the total amount of checks is $13,000 + $4,500 = $17,500. So the average daily receipts are $17,500/30 = $583.33. The weighted average delay is calculated by multiplying the average daily receipts by the average number of days it takes for the checks to clear. In this case, the average number of days is (4 + 3)/2 = 3.5 days. So the weighted average delay is $583.33 * 3.5 = $2,041.67.