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    Zero Balance Account

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    Carbide Corporation is examining its operating cash management. One of the options the firm is considering is a zero-balance account (ZBA). The firm's bank is offering a ZBA with monthly charges of $1,500, and the bank estimates that the firm can expect to earn 8% on its
    short-term investments.

    Determine the minimum average cash balance that would make this ZBA a benefit to the firm. Assume a 365-day year.

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    https://brainmass.com/business/accounting/zero-balance-account-458503

    Solution Preview

    ZBA would benefit only if savings in interest offsets the monthly ...

    Solution Summary

    This solution provides assistance determining the minimum average cash balance that would make this ZBA a benefit to the firm.

    $2.19

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