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Georg Zeller is a conservative chief financial officer. He often over-estimates the need for cash in his firm. The internal auditor has just reported to
Georg Zeller is a conservative chief financial officer. He often over-estimates the need for cash in his firm. The internal auditor has just reported to the board that Georg kept $250 000 more in the current account than was necessary for a particular 6 months period. Funds in the current account earned 0.25% while funds in the almost risk-free short-term money market earned 5.25%. The internal audit reported a cost to the firm post-tax through this action. What amount would you report to the board as the cost? Would it be post-tax?
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