Question
HotFoot Shoes would like to maintain its cash account at a minimum level of $43,000 but expects the standard deviation in net daily cash flows
HotFoot Shoes would like to maintain its cash account at a minimum level of $43,000 but expects the standard deviation in net daily cash flows to be $3,800, the effective annual rate on marketable securities to be 2.7 percent per year, and the trading cost per sale or purchase of marketable securities to be $380 per transaction.
What will be its optimal upper cash limit?
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Fundamentals Of Financial Management
Authors: Richard Bulliet, Eugene F Brigham, Brigham/ Houston
11th Edition
1111795207, 9781111795207
