1. A firms last four daily net cash flows are $12,000, $13,000, $14,500, and $10,500, respectively. With these values,

a. Forecast the day-5 net cash flow using a 3-day MA forecast.

b. Forecast the day-5 net cash flow using an ES forecast. Use an of 0.6. Use a 3-day MA for the day-4 forecast.

2 The treasurer at your firm has asked you to run an NPV analysis to determine the feasibility of switching all disbursements from checks to ACH. The processing costs of each check and ACH equal $0.75 and $0.15 respectively. The firm has 25,000 disbursement per year . The treasurer believes that the appropriate cost of capital is 8%. The variable that he is uncertain about, though, is the up-front investment that will be required to make the switch from checks to ACH. You have been asked to

a. Determine the maximum up-front cost at which the switch is feasible.

b. Decide what to do if there is certainty about the up-front investment is actually $180,000, disbursement is 20,000 and the cost of capital is 10%.

c. Decide what to do if all things in scenario 2 remains aside from processing costs of each ACH and check changing to $0.05 and $0.95 respectively

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