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A treasury manager needs to move $190,000 from one corporate account to the firm's primary account. Moving the funds by wire will cost $15 while
A treasury manager needs to move $190,000 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 $0.50. The ACH takes 1 day longer to clear. The firm's account earns an earnings credit rate of 0.75%, and the required reserve ratio is 10%. If the firm's opportunity cost of funds is 4%, what is the minimum transfer balance that justifies a wire transfer?
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Management Accounting
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
4th Edition
0730369382, 978-0730369387
