Firm OPL has average daily cash inflows (Monday through Saturday) of $15,890, $13,267, $20,654, $24,956, $37,923, and
Question:
Firm OPL has average daily cash inflows (Monday through Saturday) of $15,890, $13,267, $20,654, $24,956, $37,923, and $42,516, respectively. A wire transfer deposits money into a concentration account faster by one day if executed Monday through Thursday and by three days if executed Friday. Assuming that the additional cost of a wire transfer is $15.62 and that OPL has a cost of capital of 16% annually, on which days should wire transfers be considered? (Note: Saturday inflows should be combined with Monday inflows because banks close too early on Saturday to recognize the cash inflow.)
Cost Of CapitalCost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
Question Posted: