Goodwill company has been offered by its bank to manage its cash at a cost P35,000 per year. Under the proposed cash management , the firm can reduce the cash required on hand by P180,000. Since the bank also does a lot of record – keeping. The firm administrative cost will decrease by P2,000 per month. What should be the recommendation to the firm with respect to the proposed cash management assuming the firm opportunity cost is P12%?
Goodwill company has been offered by its bank to manage its cash at a cost P35,000 per year. Under the proposed cash management , the firm can reduce the cash required on hand by P180,000. Since the bank also does a lot of record – keeping. The firm administrative cost will decrease by P2,000 per month. What should be the recommendation to the firm with respect to the proposed cash management assuming the firm opportunity cost is P12%?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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