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?
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?
Chapter26: Monetary Policy
Section: Chapter Questions
Problem 6SQP
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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?
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