Hello sir,
In the last few lines of the case the question said ‘...that the return on cash surpluses is 5% pre-tax’.
What does it mean by ‘return on cash surpluses’?
Thanks.
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BPP Q33 Louieed (March/June 16)
7y ago#1It means that they are earning interest of 5% on any cash balances (and if they use the cash then they will be losing interest of 5%).
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