Problempurple feet wine inc receives an average of 17000 in, Ask an Expert

Accounting

Problem:

Purple Feet Wine, Inc., receives an average of $17,000 in checks per day. The delay in clearing is typically three days. The current interest rate is .017 percent per day.

Required:

Question 1: What is the company's float?

Question 2: What is the most Purple Feet should be willing to pay today to eliminate its float entirely?

Question 3: What is the highest daily fee the company should be willing to pay to eliminate its float entirely?

Note: Provide support for your underlying principle.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171288

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