Your firm generally receives 3 cheques a month. A month is defined as a 30-day period....

Your firm generally receives 3 cheques a month. A month is defined as a 30-day period. The cheque amounts and the collection delay for each cheque are: $8,100 with a delay of 3 days; $6,800 with a delay of 4 days; and $2,300 with a delay of 2 days. What is the amount of the average daily float?

Expert Solution

Average daily float = (Average amount of checks received per day * Average number of days delay) / Number of days in a month

Average daily float = [($8,100 * 3) + ($6,800 * 4) + ($2,300 * 2)] / 30

Average daily float = $1,870

jeff jeffy answered 3 years ago

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