Union Company is considering establishment of a zero-balance account. The firm currently
maintains an average balance of
$429,000
in its disbursement account. As compensation to the bank for maintaining the zero-balance
account, the firm will have to pay a monthly fee of
$1,140
and maintain a
$294,000
non-interest-earning deposit in the bank. The firm currently has no other deposits in the bank.
Evaluate the proposed zero-balance account, and make a recommendation to the firm, assuming
that it has an opportunity cost of
11.6%
.
Question content area bottom
Part 1
The current opportunity cost is
$enter your response here.
(Round to the nearest dollar.).
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Union Company is considering establishment of a zero-balance account.pdf
1. Union Company is considering establishment of a zero-balance account. The firm currently
maintains an average balance of
$429,000
in its disbursement account. As compensation to the bank for maintaining the zero-balance
account, the firm will have to pay a monthly fee of
$1,140
and maintain a
$294,000
non-interest-earning deposit in the bank. The firm currently has no other deposits in the bank.
Evaluate the proposed zero-balance account, and make a recommendation to the firm, assuming
that it has an opportunity cost of
11.6%
.
Question content area bottom
Part 1
The current opportunity cost is
$enter your response here.
(Round to the nearest dollar.)
