Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hollywood Shoes would like to maintain their cash account at a minimum level of $69,000, but expect the standard deviation in net daily cash flows

Hollywood Shoes would like to maintain their cash account at a minimum level of $69,000, but expect the standard deviation in net daily cash flows to be $5,900; the effective annual rate on marketable securities to be 7.00 percent per year; and the trading cost per sale or purchase of marketable securities to be $290 per transaction. What will be their optimal cash return point? (Round your answer to 2 decimal places.)

a). $91,717.99

b). $74,900.00

c). $87,903.31

d). $103,437.46

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jack Kapoor

12th Edition

125996776X, 9781259967764

More Books

Students also viewed these Finance questions