1. The cash manager of Verematic, Inc., is contemplating the choice between using a wire transfer and an EDT. He estimates that his investment opportunity rate is 9%. The banks ECR is currently 4%, and the reserve requirement is 12%. His bank account officer informs his that a wire transfer will cost $15 and will provide collected balances 1 day earlier than the EDT, which costs $0.30.

1. Assume that the balances transferred are above the balances required to compensate the deposit bank for its services. Calculate the minimum transfer balance required to justify the use of a wire transfer.
2. Assume that the balances transferred are below the balances required to compensate the deposit bank. Calculate the minimum transfer balance required to justify the use of a wire transfer.