Estimating the company float


Purple Feet Wine INc receives an average of $19,000 in checks per day. The delay in clearing is typically three days. The current interest rate is .019 percent per day.

A. What is the company's float?

B. What is the most Purple Feet should be willing to pay today to eliminate its float entirely?

C. What is the highest daily fee the company should be willing to pay to eliminate its float entirely?

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Finance Basics: Estimating the company float
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