Week 5 FIN 610
jowing4959
fin610_module_5_homework_-_john_wingate.xlsProblem 1
| Module Five Homework Assignment | ||
| Student's Name: | ||
| Problem 1 (from Chapter 10) | ||
| A financial manager is attempting to decide whether to use EDT or wire transfer but must first calculate the minimum balance to transfer. Using the data provided below, calculate the TBAL. | ||
| Numbers of days saved | 1 | |
| Annual investment opportunity cost rate, k | 10% | |
| Bank's earnings credit rate, ecr | 8% | |
| Required reserve rate, rr | 12% | |
| Wire transfer cost | $20 | |
| EDT cost | $0.25 | |
| 20 | ||
| 1[.10-.08*(1-.12)]/365 | 1[.2x.88]/365 |
Problem 2
| Module Five Homework Assignment | ||
| Problem 2 (from Chapter 10) | ||
| Now, let's assume that the bank's ECR = 0 in Problem 1.Using the data in Problem 1 (listed below) recalculate the TBAL. Using the ECRof 0 will result in the break-even balance for TBAL. | ||
| Numbers of days saved | 1 | |
| Annual investment opportunity cost rate, k | 0.1 | |
| Bank's earnings credit rate, ecr | 0 | |
| Required reserve rate, rr | 0.12 | |
| Wire transfer cost | 20 | |
| EDT cost | 0.25 |
Problem 3
| Module Five Homework Assignment | |
| Problem 3 (from Chapter 10) | |
| What factors determine how frequently transfers should be made from a deposit account to a concentration account? Find a minimum of one peered reviewed article form a financial journal in the SNHU Online Library to support your answer. Your response should be between 100-150 words in length. Remember to list your references in the reference section of this worksheet and properly cite them in accordance to APA citation requirements. |
References
| References |
