Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. A treasury manager needs to move $100,000 from one corporate account to the firm's primary account. Moving the funds by wire will cost $15

image text in transcribed

5. A treasury manager needs to move $100,000 from one corporate account to the firm's primary account. Moving the funds by wire will cost $15 while moving the funds by ACH will cost $0.30. The wire will clear one day faster than the ACH. The firm receives an earnings credit rate of 0.50% (reserve requirement ratio of 10%) for funds held in all accounts. If the firm's opportunity cost of funds is 6.5%, what is the minimum transfer balance? A. $88,685.95 B. $84,230.77 C. $82,546.15 D. $226.15 5. A treasury manager needs to move $100,000 from one corporate account to the firm's primary account. Moving the funds by wire will cost $15 while moving the funds by ACH will cost $0.30. The wire will clear one day faster than the ACH. The firm receives an earnings credit rate of 0.50% (reserve requirement ratio of 10%) for funds held in all accounts. If the firm's opportunity cost of funds is 6.5%, what is the minimum transfer balance? A. $88,685.95 B. $84,230.77 C. $82,546.15 D. $226.15

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management For Public, Health, And Not-for-Profit Organizations

Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell

6th Edition

150639681X, 978-1506396811

More Books

Students also viewed these Finance questions