7. A retailer firm operates in several cities within the country. The individual store managers deposit daily collections at a local bank in a non-interest bearing checking account. Twice per week, the local bank issues a depository transfer check (DTC) to the central bank at headquarters. The firm's controller is considering the use of a wire transfer. The additional cost of each transfer would be P25 but collections will be accelerated by 2 days. The annual interest paid by the central bank is 7.2% (.02% a day). Assuming 350 days in a year, at what amount of pesos transferred would it be economically feasible to use a wire transfer instead of the DTC? A. it would never be economically feasible B. any amount greater than P173 C. P125,000 and above D. above P62,500
7. A retailer firm operates in several cities within the country. The individual store managers deposit daily collections at a local bank in a non-interest bearing checking account. Twice per week, the local bank issues a depository transfer check (DTC) to the central bank at headquarters. The firm's controller is considering the use of a wire transfer. The additional cost of each transfer would be P25 but collections will be accelerated by 2 days. The annual interest paid by the central bank is 7.2% (.02% a day). Assuming 350 days in a year, at what amount of pesos transferred would it be economically feasible to use a wire transfer instead of the DTC? A. it would never be economically feasible B. any amount greater than P173 C. P125,000 and above D. above P62,500
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 6P
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