1)

HotFoot Shoes would like to maintain its cash account at a minimum level of $26,000, but expects the standard deviation in net daily cash flows to be $4,100, the effective annual rate on marketable securities to be 6.6 percent per year, and the trading cost per sale or purchase of marketable securities to be $210 per transaction.

What will be its optimal cash return point? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places.)

Optimal cash return point

$

2)

Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7.8 million. The firm also has a profit margin of 30 percent, a retention ratio of 15 percent, and expects sales of $8.8 million next year.

Assets				Liabilities and Equity
Current assets	$	2,624,000		Current liabilities	$	3,622,320
Fixed assets		5,800,000		Long-term debt		1,900,000
				Equity		2,901,680
Total assets	$	8,424,000		Total liabilities and equity	$	8,424,000

If all assets and current liabilities are expected to grow with sales, what amount of additional funds will Wind Em need from external sources to fund the expected growth? (Enter your answer in dollars not in millions.)

Additional funds needed

$