When a company writes a check, there is a period of time between when the check is written and when the money is taken out of the company's bank account. This gives the company an interest free loan that the company receives from a supplier because while they have in essence paid the money, they still have the money. Similarly, when a company receives a check, there is a delay between the time the check is received and the money is deposited in their account. This is an interest free loan that the company is giving to their customers. If the delay for checks written is greater than the delay for checks that are deposited, the company has an interest free loan equal to the amount of the checks multiplied by the number of days' difference. This is called the net float. In this question, the net float would be zero only if the checks deposited in the amount of $10,000 required the same number of days to clear as the checks written in the amount of $10,000. But the checks written take one day longer to clear than the checks deposited.
When a company writes a check, there is a period of time between when the check is written and when the money is taken out of the company's bank account. This gives the company an interest free loan that the company receives from a supplier because while they have in essence paid the money, they still have the money. Similarly, when a company receives a check, there is a delay between the time the check is received and the money is deposited in their account. This is an interest free loan that the company is giving to their customers. If the delay for checks written is greater than the delay for checks that are deposited, the company has an interest free loan equal to the amount of the checks multiplied by the number of days' difference. If the delay for checks deposited is greater than the delay for checks written, the company is giving a net loan to its customers. This is called the net float. In this question, the company's interest free interest free loan is equal to $20,000 (2 days). But the interest free loans it is extending to its customers are $10,000 (1 day). The net float is the difference between the two amounts.
When a company writes a check, there is a period of time between when the check is written and when the money is taken out of the company's bank account. This gives the company an interest free loan that the company receives from a supplier because while they have in essence paid the money, they still have the money. Similarly, when a company receives a check, there is a delay between the time the check is received and the money is deposited in their account. This is an interest free loan that the company is giving to their customers. If the delay for checks written is greater than the delay for checks that are deposited, the company has an interest free loan equal to the amount of the checks multiplied by the number of days' difference. This is called the net float. In this question, the net float is $10,000 × 1, or $10,000.
When a company writes a check, there is a period of time between when the check is written and when the money is taken out of the company's bank account. This gives the company an interest free loan that the company receives from a supplier because while they have in essence paid the money, they still have the money. Similarly, when a company receives a check, there is a delay between the time the check is received and the money is deposited in their account. This is an interest free loan that the company is giving to their customers. If the delay for checks written is greater than the delay for checks that are deposited, the company has an interest free loan equal to the amount of the checks multiplied by the number of days' difference. If the delay for checks deposited is greater than the delay for checks written, the company is giving a net loan to its customers. This is called the net float. In this question, the net float would be ($10,000) only if the checks deposited took a day longer to clear then the checks written, because the company would be in the position of giving a net loan to its customers equal to $10,000 × 1. However, in this question the checks written take a day longer to clear than the checks deposited.
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