A treasury manager would like to develop a funds concentration policy for her staff to use to determine when to transfer funds using a wire transfer or an ACH transfer. The pertinent information appears below. Each wire costs $25 Each ACH transfer costs $0.75 Opportunity cost of funds is 5% Earnings credit rate is 1% Reserve requirement ratio is 10% For a mid-week transfer, what is the minimum transfer balance that justifies a wire transfer? For transfers made on Friday, what is the minimum transfer balance that justifies a wire transfer
A treasury manager would like to develop a funds concentration policy for her staff to use to determine when to transfer funds using a wire transfer or an ACH transfer. The pertinent information appears below. Each wire costs $25 Each ACH transfer costs $0.75 Opportunity cost of funds is 5% Earnings credit rate is 1% Reserve requirement ratio is 10% For a mid-week transfer, what is the minimum transfer balance that justifies a wire transfer? For transfers made on Friday, what is the minimum transfer balance that justifies a wire transfer
Chapter15: Monetary Theory And Policy
Section: Chapter Questions
Problem 1.1P
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A treasury manager would like to develop a funds concentration policy for her staff to use to determine when to transfer funds using a wire transfer or an ACH transfer. The pertinent information appears below.
- Each wire costs $25
- Each ACH transfer costs $0.75
Opportunity cost of funds is 5%- Earnings credit rate is 1%
- Reserve requirement ratio is 10%
- For a mid-week transfer, what is the minimum transfer balance that justifies a wire transfer?
- For transfers made on Friday, what is the minimum transfer balance that justifies a wire transfer?
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