Question
HotFoot Shoes would like to maintain its cash account at a minimum level of $41,000, but expects the standard deviation in net daily cash flows
HotFoot Shoes would like to maintain its cash account at a minimum level of $41,000, but expects the standard deviation in net daily cash flows to be $5,600, the effective annual rate on marketable securities to be 5.9 percent per year, and the trading cost per sale or purchase of marketable securities to be $140 per transaction.
What will be its optimal cash return point?
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
16th edition
1337902608, 978-1337902601
