On an Average Day,your Firm Receives $11,800 in Checks from Customers.These

question 93

Multiple Choice

On an average day,your firm receives $11,800 in checks from customers.These checks clear the bank in an average of 2.8 days.The applicable daily interest rate is 0.015 percent.What is the highest daily fee your firm should pay to completely eliminate the collection float? Assume each month has 30 days.

• A)$3.72
• B)$4.96
• C)$17.78
• D)$34.18
• E)$37.20

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Definitions:

Stockout

A situation in which a company does not have enough inventory available to fill an order.

Inventory Available

Refers to the products or goods a company has in stock and is ready to sell or distribute to customers.

Obsolete Inventory

Stock that is no longer sellable due to being out of date, out of fashion, or superseded by newer products.

Materials Management

The process of planning, acquiring, moving, and controlling materials to efficiently produce goods or services.