Question
1.The standard deviation of weekly net cash flows for the Pele Emergency Care Center is $1,000. Transactions costs sell securities to replenish cash is $25
1.The standard deviation of weekly net cash flows for the Pele Emergency Care Center is $1,000. Transactions costs sell securities to replenish cash is $25 each. The annualized interest rate earned on its marketable securities is 2.0%.Pele's management likes to keep $2,000 as its minimum balance.
a.How much is the target cash balance C*?
b.How much is the average cash balance?
c.How much is the upper cash balance.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Foundations Of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
11th Canadian Edition
1259024970, 978-1259265921
