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Scott, the treasury manager Weiland Inc., is in the process of developing cash transfer rules for...

Scott, the treasury manager Weiland Inc., is in the process of developing cash transfer rules for the firm. Currently, the firm’s bank charges $15 per wire and $.50 per EDT. That EDT takes one day longer to clear. Scott believes that the firm’s current investment opportunity rate is 4%. The firm does not currently earn earnings credit on account balances.

Suppose that Scott has negotiated an ECR a 0.5% on account balances (the RRR is 10%). What is the minimum transfer balance that justifies a wire transfer?

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