Amazon's CFO Is Considering the Fees Charged by Two Banks

question 43

Multiple Choice

Amazon's CFO is considering the fees charged by two banks in trying to determine which is best for her firm.First American charges a flat $0.11 per payment and First Western requires a minimum compensating balance of $500,000 plus $0.05 per payment.If Amazon's cost of funds is 8.50%, and the expected number of payments per year is 900,000, which bank should be chosen?

• A)FW, savings = $54,000
• B)FA, savings = $23,000
• C)FW, savings = $11,500
• D)FW, savings = $18,500

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Definitions:

Retrieval

The process of getting information out of memory storage.

Consciousness

The state of being aware of and able to think about one’s own existence, thoughts, emotions, and surroundings.

Encoding

The process of converting information into a form that can be stored in memory.

Active System

An active system refers to any system that requires energy input to operate and can respond dynamically to changes in its environment.