Question
HotFoot Shoes would like to maintain its cash account at a minimum level of $42,000, but expects the standard deviation in net daily cash flows
HotFoot Shoes would like to maintain its cash account at a minimum level of $42,000, but expects the standard deviation in net daily cash flows to be $5,700, the effective annual rate on marketable securities to be 5.8 percent per year, and the trading cost per sale or purchase of marketable securities to be $130 per transaction. What will be its optimal cash return point? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
This question has been submitted twice. Both times given the incorrect answer.
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