The BM Firm Expects a Total Need of $12,500 Over

question 14

Multiple Choice

The BM firm expects a total need of $12,500 over the next 3 months. They have a beginning cash balance of $1500, and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $3.50. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. On an average day, a company writes checks totaling $1,500. These checks take 7 days to clear. The company receives checks totaling $1,800. These checks take 4 days to clear. The cost of debt is 9%. What is the firm's disbursement float?

• A) $10,500
• B) -$8,700
• C) $1,800
• D) -$10,500

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Definitions:

General Anesthesia

A medically induced coma and loss of protective reflexes, used during surgery to block pain and consciousness.

Conscious Sedation

A medical procedure that involves administering drugs to a patient to relieve pain and reduce awareness during a medical test or procedure, while maintaining the patient's ability to respond to verbal commands.

Local Anesthesia

A type of anesthesia used to numb a specific area of the body to prevent pain during surgical procedures or medical interventions.

Anticoagulant

A substance that prevents blood from clotting, used in medical treatment to prevent blood clots.