Agatha Concrete Company has been offered by its bank to manage its cash at a cost of $25,000 per year.Under the proposed cash management,the firm can reduce the cash required on hand by $300,000.Since the bank is also doing a lot of record keeping,the firm's administrative cost would decrease by $1,000 per month.What recommendation would you give the firm with respect to the proposed cash management assuming the firm's opportunity cost is 6 percent?

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The Answer of Agatha Concrete Company has been offered by its bank to manage its cash at a cost of $25,000 per year.Under the proposed cash management,the firm can reduce the cash required on hand by $300,000.Since the bank is also doing a lot of record keeping,the firm's administrative cost would decrease by $1,000 per month.What recommendation would you give the firm with respect to the proposed cash management assuming the firm's opportunity cost is 6 percent?

Agatha Concrete Company Has Been Offered by Its Bank to Manage