Explain how this problem represents disbursement float

Assignment Help Financial Management

Reference no: EM131899752

Jane James owns an appliance store. She normally receives $50,000 worth of appliances per month. She does not like to owe people money and always pays her bills on the day she receives the invoice. Someone told her that if she delayed payment, she could actually increase her profit because the money would be earning interest in her account. She went through her bills and found that she actually had an additional ten days, on average to pay her invoices. She also found that she was earning 2 percent interest on the money she had in her money market savings account. If she delayed payment by ten days, how much additional interest would she earn for the year? Explain how this problem represents a disbursement float.

Reference no: EM131899752

Questions Cloud

Biological theory and another perspective : Could each disorder be better understood by the combination of both biological theory and another perspective?

What is the purpose of a manipulation check : What is the purpose of a manipulation check? How do we conduct a manipulation check?

How should day-to-day functions be influenced instead : Why do vision and mission statements, while necessary in formulating a business, have less value over time in influencing its day-to-day functions?

Different types of validity : Please Compare and contrast at least two different types of validity (face, content, construct, etc.). Give an original example to illustrate your answer.

Explain how this problem represents disbursement float : how much additional interest would she earn for the year? Explain how this problem represents a disbursement float.

What is the optimal order quantity in the newsboy problem : What is the optimal order quantity in the Newsboy Problem if the stocking point is capacitated?

Deficient criterion measure for servers at restaurants : What would be an example of a deficient criterion measure for servers at restaurants?

Draw auxiliary graph used for solving sao vincent problem : Draw the auxiliary graph used for solving the Sao Vincent Chemical problem as a shortest-path problem.

Social commentator argues that the welfare programs : A social commentator argues that the welfare programs which were introduced in the mid 1960s have caused an unprecedented expansion of poverty in the US

User Account

All Pages