1.Can you explain the process of the solution. 2. What is this cash released. 3. Is the benefit of X in choosing to open a ZBA is if company maintains ZBA will have a 2,400 net benefit? is there any assumption in this answer?

Transcribed Image Text:

If X will choose to open a ZBA, the benefit will be: Cash released = P420,000 - P300,000 (balance to be maintained) = P120,000 Interest from released cash: P120,000 x 12% = P14,400 Cost of maintaining a ZBA: P1,000 x 12 months = P12,000 Net benefit of maintaining a ZBA: (P14,400 - P12,000) = P2,400 X should choose to maintain a ZBA since it will result to a net benefit of P2,400 If X will choose to open a ZBA, the benefit will be: Cash released = P420,000 - P300,000 (balance to be maintained) = P120,000 Interest from released cash: P120,000 x 12% = P14,400 Cost of maintaining a ZBA: P1,000 x 12 months = P12,000 Net benefit of maintaining a ZBA: (P14,400 - P12,000) = P2,400 X should choose to maintain a ZBA since it will result to a net benefit of P2,400

Answer rating: 100% (QA)

1The process of the solution involves calculating the potential financial benefit of opening and mai... View the full answer