If Average Daily Remittances Are $6 Million, and "Extended Disbursement

question 33

Multiple Choice

If average daily remittances are $6 million, and "extended disbursement float" adds 2 days to the disbursement schedule, how much should the firm be willing to pay for a cash management system if the firm earns 7% on excess funds.

• A) $500,000
• B) $1,500,000
• C) $0
• D) $840,000

---

Definitions:

Crude Oil Refining

The industrial process of transforming crude oil into useful petroleum products such as fuel, gasoline, and diesel.

Light Gases

Gases with low molecular weights, such as hydrogen, helium, or methane, that are often used in applications requiring low density.

Lightest Fraction

In petrochemistry, refers to the fraction of a crude oil that contains the lightest, most volatile components, such as gases and small hydrocarbons.

Volatile Components

Substances that can easily vaporize at room temperature or under mild heating, often contributing to the aroma of foods or products.