Determine the average daily float

Assignment Help Financial Management

Reference no: EM131528622

DEF, Inc has determined that it has three basic batch of collections with the following associated collection float:

Batch Average Collections Days of float

#1 (Local) $10,000,000 2

#2 (Regional) $5,000,000 4

#3 (Distant) $25,000,000 6

Determine the average daily float for the above collections for a typical month.

Using the information from the above problem, assume that if DEF changed to a lockbox. Changing to the lockbox would have no effect on the local collections (Batch 1), but would reduce the regional float (Batch 2) by 1 day, and the Distant Float (Batch 3) by 2 days. If the cost of capital is 7%, what is the value of the float reduction?

Reference no: EM131528622

Questions Cloud

Write an essay that provides an overview of the us congress : Write a 525- to 700-word essay that provides an overview of the U.S. Congress. The steps involved in a bill becoming a law.

What is the amount of the monthly payments : A commercial bank will loan you $32,463 for 8 years to buy a car. The loan must be repaid in equal monthly payments at the end of the month.

Identify two types of staffing models : Identify two (2) types of staffing models that could apply to your chosen scenario and determine which model would be best suited for efficiency

Calculate the cost of debt equity and the wacc : The firm decides to raise $30 million by selling equity and debt. The investment bankers hired by your firm contact potential investors and come back.

Determine the average daily float : Determine the average daily float for the above collections for a typical month.

What is the new break-even point : Eaton Tool Company has fixed costs of $393.600, sells its units for $88, and has variable costs of s47 per unit.

Explain the evolution of presidential power : Describe the evolution of presidential power (include examples of past presidents). The powers and roles granted by the U.S. Constitution to the President.

What is the default risk premium of treasury bond : The 15 year Treasury bonds are yielding 3.75% while a 15 year AAA rated corporate bond yields 6.25%. If the liquidity premium on this corporate bond is 0.75%.

What we know about a historical figure : Have you ever wondered what William Shakespeare's Facebook profile would look like, assuming he was alive today

User Account

All Pages