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Bavarian Sausage Cash Transfer

Question 1

Multiple Choice

Bavarian Sausage Cash Transfer
Bavarian Sausage needs to transfer $250,000 from its deposit account into its concentration account. The company could do it with an EDT which would cost $1.50 or a wire transfer for $17. The wire transfer would result in the funds being deposited in the concentration account 2 days earlier. The firm's opportunity cost is 10% and we assume a 360 day year.
-What is the minimum transfer amount for which the transfer would be beneficial for Bavarian Sausage?


A) $55,800
B) $27,900
C) $13,850
D) $41,950

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