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XYZ Company's cash manager is evaluating cash concentration transfer options. The company has an 8% cost of funds and $50,000 in average daily field cash receipts. The wire transfer results in the transfer of funds one day faster. Which of the following options correctly ranks the transfer choices from most cost-effective to least cost-effective?
1. Electronic depository transfer costing $1.00
2. Electronic depository transfer costing $2.50
3. Wire transfer costing $8.00
4. Wire transfer costing $15.00
Suggested Answer: C
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36 comments · newest first
MA
Marisha
9 months ago
Not sure if the faster transfer is worth the extra cost.
TI
Timothy
9 months ago
Definitely option A, those fees are low!
MA
Margot
9 months ago
Wait, why would anyone choose the $15 wire transfer?
LA
Lashawna
9 months ago
I’m a bit confused about the one-day faster transfer. Does that really make the wire transfers more cost-effective overall?
CA
Carma
10 months ago
I practiced a similar question where we had to compare costs, and I think the electronic transfers should rank higher because they cost less.
KA
Kattie
10 months ago
I think option B makes the most sense!
KI
Kirk
10 months ago
The wire transfer costs way more than the electronic options.
IR
Ira
10 months ago
I think the wire transfers are more expensive, but they might save time, which could be a factor in the ranking.
JO
Josefa
10 months ago
I remember we discussed how to calculate the cost of funds for different transfer methods, but I'm not sure how to apply it here.
MA
Malinda
11 months ago
I feel pretty confident about this one. I just need to do the math to determine which option has the highest net cost savings.
TA
Talia
11 months ago
This is tricky, I'm not sure I fully understand how to rank the options from most to least cost-effective. I'll need to re-read the question carefully.
AL
Alesia
11 months ago
Okay, I think I've got it. The key is to calculate the daily cost savings from the faster transfer and compare that to the transfer fee for each option.
CE
Celeste
11 months ago
Hmm, I'm a bit confused about how to compare the different transfer options. Do I need to factor in the cost of funds as well?
BU
Bulah
12 months ago
This question seems straightforward, I just need to calculate the cost-effectiveness of each option based on the transfer speed and cost.
LO
Lorrine
12 months ago
Easy peasy, just plug in the numbers and sort them from lowest to highest. The wire transfers are more expensive, but they're faster, so that's the tricky part.
MI
Micaela
12 months ago
Okay, I think I've got this. We want to rank the options from most to least cost-effective, so we need to calculate the total cost for each one, including the cost of funds.
SE
Serina
1 year ago
Hmm, I'm a bit confused. Do we need to consider the cost of funds as well as the transfer fees? Not sure how that factors in.
AM
Amina
1 year ago
This question seems straightforward, just need to compare the costs and speed of the different transfer options.
RA
Raul
1 year ago
I think the correct ranking is 1, 3, 2, 4 which is option B.
LA
Larae
1 year ago
Haha, Adelle's got a point. Let's just hope the exam doesn't require us to do any advanced math. I'm more of a word person myself.
SE
Selene
1 year ago
I agree, the wire transfer costing $8.00 seems to be the most cost-effective.
CE
Cecilia
1 year ago
I think the correct ranking is option C) 3, 1, 2, 4.
JE
Jeniffer
2 years ago
I believe the wire transfer costing $15.00 is the least cost-effective option.
AD
Adelle
2 years ago
This question is making my head spin. Can we get a calculator up in here or something?
OL
Olene
1 year ago
Let's double-check the calculations just to be sure.
BR
Brigette
1 year ago
I see your point, but I believe option C is more cost-effective overall.
JE
Jeannetta
1 year ago
But wouldn't option B also make sense? 1, 3, 2, 4
KA
Kati
1 year ago
I think the correct ranking is option C: 3, 1, 2, 4
DO
Dorian
2 years ago
I agree with Ahmed. The wire transfer options, despite the higher costs, are likely the most cost-effective due to the faster fund transfer.
CY
Cyril
2 years ago
I'm not sure about that. The electronic depository transfer options seem like they could be more cost-effective, especially the one costing $1.00.
GL
Glendora
2 years ago
I agree with Luann, the electronic depository transfer at $1.00 seems like the best choice.
AH
Ahmed
2 years ago
The wire transfer option seems to be the most cost-effective, since it results in the transfer of funds one day faster.
RO
Rory
2 years ago
So the ranking would be 3, 1, 2, 4.
DA
Danica
2 years ago
I agree, it's worth it to pay a little more for the faster transfer.
LI
Linn
2 years ago
I think the wire transfer costing $8.00 is the most cost-effective option.
LU
Luann
2 years ago
I think the most cost-effective option is the electronic depository transfer costing $1.00.