Question

In a typical month, the montrose corporation receives 100 checks totaling $111,000. these are delayed two days, on average. assume 30 days in a month. what is the average daily float?

Answer 1

The average daily float for the Montrose Corporation is $7,400, calculated by dividing the product of the total amount of delayed checks and average delay days by the number of days in the month.

Step-by-step explanation:

The Montrose Corporation's average daily float can be calculated by determining the total amount of money in checks that is delayed in processing or clearance. The question states that 100 checks totaling $111,000 are delayed by an average of two days. Since we are interested in finding the average daily float for a typical month of 30 days, we can use the following formula:

Daily Float = (Total Amount of Delayed Checks × Average Delay in Days) / Number of Days in a Month

Using the values from the Montrose Corporation:

Daily Float = ($111,000 × 2 days) / 30 days

This results in a daily float of:

Daily Float = $7,400

The Montrose Corporation, therefore, has an average daily float of $7,400.