Rossiter's Generally Receives 3 Checks a Month in the Amounts

question 63

Multiple Choice

Rossiter's generally receives 3 checks a month in the amounts of $46,500, $32,000, and $63,800. On average, it takes 1.5 days for the funds from these checks to be added to the firm's available balance at the bank once they have been deposited. What is the amount of the average daily float?

• A) $4,743
• B) $7,115
• C) $14,209
• D) $21,506
• E) $47,433

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Definitions:

Leverage

The use of various financial instruments or borrowed capital, such as debt, to increase the potential return of an investment.

Stock Price

The cost of purchasing a single share of a company, which fluctuates based on market conditions and investor perceptions.

EBIT

Earnings Before Interest and Taxes represents a company's profit, encompassing all revenues and costs apart from interest and taxes.

EPS

Earnings per share. A firm’s earnings stated on a per-share outstanding basis. An important measure of business performance in the stock market.