CHAPTER 27
CASH MANAGEMENT AT RICHMOND
CORP.
1. The amount the company will have available is the future value of the transfers, which are an annuity.
The amount of each transfer is one minus the wire transfer cost, times the number of transfers, which
2. The bank will accept the ACH transfers from the four different banks, so the company incurs a transfer
fee from each collection center. The future value of the deposits will now be:
3. To find the cost at which the company is indifferent, we set the amount available we found in Question
1 equal to the cost equation we used in Question 2. Setting up this equation where X stands for the