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Assume a particular lockbox of a firm receives an average of $85000 per day. For this particular situation DTC (Depository Transfer Check) would cost 1.5
Assume a particular lockbox of a firm receives an average of $85000 per day. For this particular situation DTC (Depository Transfer Check) would cost 1.5 dollar and provide 2.5 days availability. Whereas, ACH (Automated Clearing House) would cost 3 dollar availability 1 day and WT (Wire Transfer) 16 dollars and availability .5 days. (thus business volume of cash is very high, need immediate cash) The required rate of return is 10% per year The number of transfer is 250 Calculate the opportunity cost of float and total transfer cost.
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