A Mail-Order Firm Processes 5,000 Checks Per Month

question 92

Multiple Choice

A mail-order firm processes 5,000 checks per month.Of these,55 percent are for $55 and 45 percent are for $65.The $55 checks are delayed 2 days on average; the $65 checks are delayed 5 days on average.Assume each month has 30 days.The interest rate is 6 percent per year.How much should the firm be willing to pay to reduce the weighted average float by 1.4 days?

• A)$4,165
• B)$13,883
• C)$41,650
• D)$138,883
• E)$416,500

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Definitions:

Osmoregulation

The process by which organisms maintain the balance of water and electrolytes in their bodies to sustain life.

Marine Invertebrate

Organisms without a backbone living in marine environments.

Freshwater

Water that contains minimal amounts of dissolved salts, found in rivers, lakes, streams, and groundwater, essential for drinking, agriculture, and habitat for many organisms.

Buoyancy

The upward force exerted by a fluid that opposes the weight of an object immersed in it, enabling the object to float or to seem lighter.