Union company is examining its operating cash management, Ask an Expert

Finance

Union Company is examining its operating cash management. One of the options the firm is considering is a zero-balance account (ZBA).

The firm's bank is offering a ZBA with monthly charges of $1,500, and the bank estimates that the firm can expect to earn 8 percent on its short-term investments.

Determine the minimum average cash balance that would make this ZBA a benefit to the fi rm. Assume a 365-day year.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92071375

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