On an Average Day,Wilson & Wilson Receives $7,800 in Checks

question 32

Multiple Choice

On an average day,Wilson & Wilson receives $7,800 in checks from customers.These checks clear the bank in an average of 1.7 days.The applicable daily interest rate is 0.022 percent.What is the highest daily fee this firm should pay to completely eliminate its collection float? Assume each month has 30 days.

• A)$1.72
• B)$2.92
• C)$17.20
• D)$24.30
• E)$29.17

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Definitions:

Net Periodic Pension Cost

The total cost charged to expense related to pension plans during a certain period, including service and interest costs.

Defined Benefit Pension Plan

A defined benefit pension plan is a retirement plan where the employer promises a specified pension payment upon retirement, based on an algorithm involving salary, age, and years of service.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards used in financial reporting and accounting.

Conceptual Framework

An analytical structure used to make the complex interrelationships among financial concepts, objectives, and standards more understandable and coherent.