A Mail-Order Company Processes 8,200 Checks Per Month

question 65

Multiple Choice

A mail-order company processes 8,200 checks per month. Of these, 64 percent are for $39 while the remainder are for $69. The $39 checks have a collection delay of 2.1 days on average while the $69 checks are delayed 1.8 days on average. Assume each month has 30 days. The interest rate is 5.2 percent per year. What is the maximum amount that should be paid to reduce the weighted average float to 1.5 days?

• A) $10,990
• B) $6,130
• C) $8,650
• D) $5,825
• E) $9,675