1. 16.

Cash management policy [LO 18.3] Rework Problem 15 assuming:

1. Kalamunda maintains a minimum cash balance of $40 million.

2. Kalamunda maintains a minimum cash balance of $20 million.

Based on your answers in

(a) and (b), do you think the firm can boost its profit by changing its cash management policy? Are there other factors that must be considered as well? Explain.