Find the break-even size of wire transfer if the cost of wire transfer is $20, the daily interest rate is 0.02 percent and the reduction in float is three days.

Question

Quizplus · Accepted Answer

The break-even size of a wire transfer can be calculated using the following formula:

Break-even size = Cost of wire transfer / (Daily interest rate x Reduction in float)

Plugging in the given values, we get:

Break-even size = $20 / (0.02% x 3) 
                = $20 / (0.0006)
                = $33,333.33

Therefore, any wire transfer size above $33,333.33 would result in a net gain for the company, while any transfer size below would result in a net loss. Choice (C) is the only option that matches this break-even calculation.

Find the Break-Even Size of Wire Transfer If the Cost