b) A firm makes monthly cash forecasts and distributes these forecasts to a daily basis. For the upcoming month, anticipated cash inflows are Tk. 1,000,000. Each of the first two weeks has five working days. 20% of the month's total cash receipts are expected to be received during the first week and 28% are expected to be received during the second week. Within each week, receipts are expected to be received as follows: Day Monday Tuesday Wednesday Thursday Friday Proportion 0.20 0.23 0.07 0.20 0.30 The firm writes checks on Tuesday for the entire week's expenses, except for taxes. 10.Ten percent of these checks are cashed on Tuesday, 5 percent on Wednesday, 60 percent on Thursday, and the remainder on Friday. Checks totaling Tk.250,000 are to be written on Tuesday of the first week, and checks totaling Tk.200,000 are to be written on Tuesday of the second week. A tax payment in the amount of Tk. 100.000 will be made on Wednesday of the second week via wire transfer. Beginning cash is Tk.50,000; this is also the desired cash at all times during the first two weeks of the month. Generate the distributed daily cash forecast for the first two weeks of the upcoming month. Baumol model and Beranek model. e) A firm has a standard deviation of daily average cash balance Tk. 25,000. The cost of 7 each transaction is Tk.50 while return from investment is 12%. The firm wishes to maintain cash balance of Tk. 1.00,000 at any point of time and firm has 30 transactions in a year. Requirements: i. What is the optimal cash balance without any lower limit? il. What is the control limit? III. What will be the actual optimal cash required by the tim? lv. What is the cost of holding that cash balances? guany position b) Given the following financial statement data, calculate the net operating cycle for this company in Millions (TK) Credit Sales 40,000 Cost of goods sold 30,000 Accounts receivable 3.000 Inventory- Beginning balance 1.500 Inventory-Ending balance 2.000 Accounts payable 4,000 c) For a 91-day Tk.100.000 T-bill sold at a discounted rate of 791%, calculate the following: i. Money market yield ii. Bond equivalent yield e) The following inventory data have been established for the Thomson Company Orders must be placed in multiples of 100 units; annual sales are 3,38,000 units, the purchase price per unit is 56; carrying costs is 20 percent of the purchase price of goods; fixed order cost is $48, and 3 days are required for delivery Requirements: i. What is the EOO? ii. How many orders should Thomson place each year? ii. At what inventory level should an order be made? iv. Calculate the total cost of ordering and carrying inventories if the order quantity is 4,800 units, or 6,000 units. Also calculate the total costs if the order quantity is the EOQ. b) You are asked to select one of the following choices as the best offer for borrowing Tk 5,000,000 for one month: i. Drawing down on a line of credit at 6.5% with a % commitment fee on the full amount. One-twelfth of the cost of the commitment fee (which gives an option to borrow any time during the year) is allocated to the first month. ii A banker's acceptance at 6.75%, an all-inclusive rate Hi Commercial paper at 6.15% with a dealer's commission of 1/8 % and a backup line cost of %, both of which would be assessed on the Tk 5 million of commercial paper issued. c) Suppose a firm obtains a revolving credit arrangement of Tk. 500.000 from Prime Bank Ltd. on 1 January 2010 for the next 6 months at 12 percent interest rate and 2.5 percent commitment fee. If the firm withdraws Tk. 370.000 within this specified time period from Prime Bank, then calculate Effective Annual Rate (EAR) for the firm 2 b) A firm makes monthly cash forecasts and distributes these forecasts to a daily basis. For the upcoming month, anticipated cash inflows are Tk. 1,000,000. Each of the first two weeks has five working days. 20% of the month's total cash receipts are expected to be received during the first week and 28% are expected to be received during the second week. Within each week, receipts are expected to be received as follows: Day Monday Tuesday Wednesday Thursday Friday Proportion 0.20 0.23 0.07 0.20 0.30 The firm writes checks on Tuesday for the entire week's expenses, except for taxes. 10.Ten percent of these checks are cashed on Tuesday, 5 percent on Wednesday, 60 percent on Thursday, and the remainder on Friday. Checks totaling Tk.250,000 are to be written on Tuesday of the first week, and checks totaling Tk.200,000 are to be written on Tuesday of the second week. A tax payment in the amount of Tk. 100.000 will be made on Wednesday of the second week via wire transfer. Beginning cash is Tk.50,000; this is also the desired cash at all times during the first two weeks of the month. Generate the distributed daily cash forecast for the first two weeks of the upcoming month. Baumol model and Beranek model. e) A firm has a standard deviation of daily average cash balance Tk. 25,000. The cost of 7 each transaction is Tk.50 while return from investment is 12%. The firm wishes to maintain cash balance of Tk. 1.00,000 at any point of time and firm has 30 transactions in a year. Requirements: i. What is the optimal cash balance without any lower limit? il. What is the control limit? III. What will be the actual optimal cash required by the tim? lv. What is the cost of holding that cash balances? guany position b) Given the following financial statement data, calculate the net operating cycle for this company in Millions (TK) Credit Sales 40,000 Cost of goods sold 30,000 Accounts receivable 3.000 Inventory- Beginning balance 1.500 Inventory-Ending balance 2.000 Accounts payable 4,000 c) For a 91-day Tk.100.000 T-bill sold at a discounted rate of 791%, calculate the following: i. Money market yield ii. Bond equivalent yield e) The following inventory data have been established for the Thomson Company Orders must be placed in multiples of 100 units; annual sales are 3,38,000 units, the purchase price per unit is 56; carrying costs is 20 percent of the purchase price of goods; fixed order cost is $48, and 3 days are required for delivery Requirements: i. What is the EOO? ii. How many orders should Thomson place each year? ii. At what inventory level should an order be made? iv. Calculate the total cost of ordering and carrying inventories if the order quantity is 4,800 units, or 6,000 units. Also calculate the total costs if the order quantity is the EOQ. b) You are asked to select one of the following choices as the best offer for borrowing Tk 5,000,000 for one month: i. Drawing down on a line of credit at 6.5% with a % commitment fee on the full amount. One-twelfth of the cost of the commitment fee (which gives an option to borrow any time during the year) is allocated to the first month. ii A banker's acceptance at 6.75%, an all-inclusive rate Hi Commercial paper at 6.15% with a dealer's commission of 1/8 % and a backup line cost of %, both of which would be assessed on the Tk 5 million of commercial paper issued. c) Suppose a firm obtains a revolving credit arrangement of Tk. 500.000 from Prime Bank Ltd. on 1 January 2010 for the next 6 months at 12 percent interest rate and 2.5 percent commitment fee. If the firm withdraws Tk. 370.000 within this specified time period from Prime Bank, then calculate Effective Annual Rate (EAR) for the firm 2