1. A treasury manager is in the process of developing cash transfer rules for the firm. Currently, the firm's bank charges $15 per wire and $0.30 per ACH. The ACH takes 1 day longer to clear. The firm's account earns an earnings credit rate of 0.50%, and the required reserve ratio is 10%. If the firm's opportunity cost of funds is 6.5%, what is the minimum transfer balance?
a. $86,546.15
b. $84,230.75
c. $88,685.95
d. $82,276.35
2. In comparing the internal rate of return and net present value methods of evaluation,
a) internal rate of return is theoretically superior, but financial managers prefer net present value.
b) net present value is theoretically superior, but financial managers prefer to use internal rate of return.
c) financial managers prefer net present value, because it is presented as a rate of return.
d) financial managers prefer net present value, because it measures benefits relative to the amount invested.