On an Average Day, a Company Writes Checks Totaling $1,500

question 24

Multiple Choice

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 net float?

• A) $300
• B) -$3,300
• C) $3,300
• D) -$300

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Definitions:

Quantum Meruit

A legal principle allowing one to recover reasonable value of services rendered when no contract exists or when a contract is unenforceable.

Gratuitous Promise

A promise made without expecting anything in return, lacking the legal enforceability of a contract due to the absence of consideration.

Binding Contract

An agreement that is legally enforceable in a court of law, holding parties to their promises.

Authenticate

The process of proving or validating the authenticity of something, often through verification of its origin or identity.