QUESTION 1 You are an analyst in the Treasurer's department with Wilson Inc , a multinational corporation with its primary bank account in the U S and 3 other secondary accounts at other banks in the U S You have been tasked with answering questions for the head of the Department on a few key concerns Below are the numbers you requested to help in answering the questions U S BANKING INFORMATION Monthly average ledger balance at U S Bank $3,500,000 00 Monthly average deposit float $750,000 00 Monthly Service Charge US Bank $1,000 00 Earnings Credit Rate US Bank 0 007 Required Reserves Ratio 0 03 30 365 0 0822 Wire Transfer Cost $15 ACH cost $0 50 INFO ON COLLECTIONS FROM CUSTOMERS Number of remittances per month 9000 Average face value of monthly remittances $25,000 00 Mail float in house processing 2 Processing float in house processing 2 Availability float in house processing 2 Days float 6 Per check Variable cost of in house Processing 0 4 Fixed Cost of in house check processing $2,500 00 Days float with lockbox alternative 4 Per check variable cost of lockbox alternative 0 8 Fixed Cost of lockbox alternative $3,000 00 INFO ON DISBURSEMENTS TO SUPPLIERS Disbursements per year 3500 Check cost per check $1 50 ACH costs per check $0 50 upfront cost to switch fully to ACH system $25,000 DAILY NET CASH FLOWS (10 days into November) Day Net Cash Flow 1 18000 2 20000 3 23000 4 25000 5 26000 6 35000 7 32000 8 25000 9 26000 10 27000 MONTHLY SALES FORECASTS INFORMATION October sales $500,000 00 of sales collected in month of sale 0 7 of sales collected in following month 0 3 of sales in Cost of goods sold 0 75 Monthly lease payment $125,000 00 Cash position end of October $120,000 00 Target cash balance $80,000 00 Sales forecast for November $450,000 00 Sales forecast for December $350,000 00 MISCELLANEOUS INFO Company's Discount Rate 12 Question 1 What is the monthly collected balance for Wilson's at it's US bank a $3,500,000 b $2,750,000 c $1,500,000 d $2,500,000 QUESTION 2 What is the monthly earnings credit for Wilson's at it's US bank a $1534 73 b $1123 43 c $1000 50 d $750 23 4 points QUESTION 3 What collected balance is required to ensure that Wilson's service charges are always offset by the earnings credit a $1,237,666 45 b $1,500,250 c $1,791,850 76 d $1,915,000 25 4 points QUESTION 4 Suppose a second bank offers Wilsons an earnings credit rate of 90 What would be the difference in the earnings credits between the 2 banks a $300 00 b $438 49 c $1973 22 d None of the above These questions go together, please help

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QUESTION 1 You are an analyst in the Treasurer's department with Wilson Inc., a multinational corporation with its primary bank account in the U.S. and

QUESTION 1

You are an analyst in the Treasurer's department with Wilson Inc., a multinational corporation with its primary bank account in the U.S. and 3 other secondary accounts at other banks in the U.S. You have been tasked with answering questions for the head of the Department on a few key concerns. Below are the numbers you requested to help in answering the questions.

U.S. BANKING INFORMATION
Monthly average ledger balance at U.S. Bank	$3,500,000.00
Monthly average deposit float	$750,000.00
Monthly Service Charge_US Bank	$1,000.00
Earnings Credit Rate_ US Bank	0.007
Required Reserves Ratio	0.03
30/365	0.0822
Wire Transfer Cost	$15
ACH cost	$0.50

INFO ON COLLECTIONS FROM CUSTOMERS
Number of remittances per month	9000
Average face value of monthly remittances	$25,000.00
Mail float - in house processing	2
Processing float - in house processing	2
Availability float - in house processing	2
Days float	6
Per check Variable cost of in-house Processing	0.4
Fixed Cost of in-house check processing	$2,500.00
Days float with lockbox alternative	4
Per check variable cost of lockbox alternative	0.8
Fixed Cost of lockbox alternative	$3,000.00
INFO ON DISBURSEMENTS TO SUPPLIERS
Disbursements per year	3500
Check cost_ per check	$1.50
ACH costs_ per check	$0.50
upfront cost to switch fully to ACH system	$25,000
DAILY NET CASH FLOWS (10 days into November)
Day	Net Cash Flow
1	18000
2	20000
3	23000
4	25000
5	26000
6	35000
7	32000
8	25000
9	26000
10	27000
MONTHLY SALES FORECASTS INFORMATION
October sales	$500,000.00
% of sales collected in month of sale	0.7
% of sales collected in following month	0.3
% of sales in Cost of goods sold	0.75
Monthly lease payment	$125,000.00
Cash position end of October	$120,000.00
Target cash balance	$80,000.00
Sales forecast for November	$450,000.00
Sales forecast for December	$350,000.00
MISCELLANEOUS INFO
Company's Discount Rate	12%

Question 1: What is the monthly collected balance for Wilson's at it's US bank

	a.	$3,500,000
	b.	$2,750,000
	c.	$1,500,000
	d.	$2,500,000

QUESTION 2

What is the monthly earnings credit for Wilson's at it's US bank?

a.
$1534.73

b.
$1123.43

c.
$1000.50

d.
$750.23

4 points

QUESTION 3

What collected balance is required to ensure that Wilson's service charges are always offset by the earnings credit?

a.
$1,237,666.45

b.
$1,500,250

c.
$1,791,850.76

d.
$1,915,000.25

4 points

QUESTION 4

Suppose a second bank offers Wilsons an earnings credit rate of .90%. What would be the difference in the earnings credits between the 2 banks?

a.
$300.00

b.
$438.49

c.
$1973.22

d.
None of the above