Union Company is examining its operating cash management One of
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% on its short-term investments. Determine the minimum average cash balance that would make this ZBA a benefit to the firm. Assume a 365-day year.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help