Slimware Is Considering Establishing a Zero-Balance System for Its Payroll

question 67

Multiple Choice

Slimware is considering establishing a zero-balance system for its payroll account. Currently, the firm pays its hourly employees every week on late Friday afternoon and puts a check for $750,000 in the bank to cover the payroll each Monday morning. Slimware has determined that the checks clear its bank as follows: ? $$\begin{array} { l c } \text { Day } & \text { Percent clearing } \\\text { Monday } & 26 \% \\\text { Tuesday } & 51 \% \\\text { Wednesday } & 14 \% \\\text { Thursday } & 7 \% \\\text { Friday } & 2 \%\end{array}$$ ?
What is the annual pretax return to Slimware if the firm can earn 9% on any funds released from employing the zero-balance system? Assume the company has 52 weekly pay periods each year.

• A) $10,385
• B) $199.72
• C) $24,601
• D) $17,488

---

Definitions:

Ion Activity

The measure of the effective concentration of ions in a solution, affecting the chemical reactivity and interactions among ions in biological and chemical systems.

Cyclothymic Disorder

A mood disorder characterized by chronic, fluctuating mood disturbance involving numerous periods of hypomanic symptoms and periods of depressive symptoms.

Mood Swings

Dramatic fluctuations in a person's emotional state, often seen in various mental health conditions but can also occur in the general population.

Manic Episodes

Periods of abnormally elevated mood and energy levels, often found in bipolar disorder, that can affect behavior and functioning.