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answer to Essay question #4 on page 150 (Gleim part II)

  • 1.  answer to Essay question #4 on page 150 (Gleim part II)

    Posted 04-16-2019 01:27 PM
    interest income from average daily balances:
    ($200,000*4*0.06)                                                                               $48,000
    interest income from additional holiday volume:
    [($1,250,000*4 days saved *4 holidays)/360]*0.06                                 3,333

    Total incremental interest income                                                                                  $51,333

    Question: The total incremental interest income should be an annual unit. When calculating benefits from additional holiday volume, why is ($1,250,000*4 days saved *4 holidays)*0.06 divided by 360 for a daily number?

    Can anyone help me out? Thanks

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    Jianghong Cui
    Accountant
    HZ WIND POWER

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