Problem:
Purple Feet Wine, Inc., receives an average of $17,000 in checks per day. The delay in clearing is typically three days. The current interest rate is .017 percent per day.
Required:
Question 1: What is the company's float?
Question 2: What is the most Purple Feet should be willing to pay today to eliminate its float entirely?
Question 3: What is the highest daily fee the company should be willing to pay to eliminate its float entirely?
Note: Provide support for your underlying principle.