Two banks, First Fidelity Bank and First Union Bank, have offered to process Zack’s retail charge card payments. First Fidelity will process the payments for a fee of $0.15 per payment with no compensating balance required. First Union will process the payments “free of charge,” provided that Zack’s maintains a compensating balance of $3,000,000 at the bank. Zack’s averages 125,000 payments per month from its credit card holders. The company can earn 8 percent before taxes on any available funds.
a. Determine which of the two payment processing proposals Zack’s should accept if the objective is to minimize costs.
b. Determine the rate of return (i.e., Zack’s opportunity cost of funds) at which the costs of the two proposals would be equal.
c. Determine the number of payments per month at which the costs of the two proposals would be equal, assuming that the processing fees ($0.15) and compensating balances ($3,000,000) remain constant.
Suppose the price of a product rises and the total revenue of sellers increases. a. It can be concluded that the demand for the product is elastic. b. It can be con...Jun 07 2021
Do group members have an ethical responsibility to report shirkers to leadership? If you were working on a group project for a class and a group member was social loafing...Jul 23 2020
Question 11.11. Wilson Corporation granted anincentive stock option to Reva on January 1, two years ago. Theoption price was $300, and the FMV of the Wilson stock was als...May 23 2021
Choose the correct answer.The size of carry-on baggage on Delta Airlines flights should not exceed (a) 22" x 14" x 9", (b) 22 by 14 by 9 inches, including handles and wheels.Jul 20 2021
Amy, a self employed US customs broker, obtained a customs broker’s license from US Customs and Border Protection in 1991. Since 2003 Amy has operated a customs brokerage...May 02 2020
Suppose that the paper clip industry is perfectly competitive. Also assume that the market price for paper clips is 2 cents per paper clip. The demand curve faced by e...Dec 05 2019
BCD Inc sells its products for $12 each The company’s volume has remained unchanged for some time at 10,000 units per month although it has spare capacity Production cost...Mar 23 2020
Use the following information to work Problems 1 and 2. Microsoft: We’re not gouging Europe on Windows 7 pricing Regulators in the European Union have charged Microsoft w...Jun 03 2020
Math Problem. HELP!!?Apr 28 2020
A square metal plate of 10 cm side moves parallel to another plate with a velocity of 10 cm s-1 , both plates immersed in water. If the viscous force is 200 dyne and visc...May 29 2021