The cash manager of verematic inc is contemplating the, Ask an Expert

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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 bank's ECR is currently 4%, and the reserve requirement is 12%. His bank account officer informs his that a wire transfer will costs $0.30. a. 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. b. 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.

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Financial Management, Finance

Category:- Financial Management
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