On an Average Day, Your fiRm Receives $21,800 in Cheques

question 197

Multiple Choice

On an average day, your firm receives $21,800 in cheques from customers. These cheques are processed and clear the bank in an average of 1.8 days. The applicable daily interest rate is .0185
Percent. What is the highest daily fee your firm should pay to completely eliminate the collection
float? Assume each month has 30 days.

• A) $5.42
• B) $5.97
• C) $6.50
• D) $7.26
• E) $8.01

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Definitions:

Negligible

So small or unimportant as to be not worth considering; insignificant.

Cognitive Revolution

A significant shift in psychology during the 1950s-1970s, emphasizing the study of the mind and mental processes over behaviorist approaches.

Human Behavior

The range of actions and mannerisms exhibited by humans, influenced by culture, attitudes, emotions, values, and genetics.

Methods of Science

Systematic and empirical approaches to the investigation and understanding of phenomena, involving observation, hypothesis, and experimentation.