Question
Intro Never Finis Inc. needs $500,000 in cash per year and has a policy of selling marketable securities every week. The interest rate on marketable
Intro
Never Finis Inc. needs $500,000 in cash per year and has a policy of selling marketable securities every week. The interest rate on marketable securities is 2.8% and it costs $40 to buy or sell securities.
Attempt 1/10 for 8.5 pts.
Part 1
What are the trading costs with the current policy?
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Attempt 1/10 for 8.5 pts.
Part 2
What are the opportunity costs with the current policy?
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Attempt 1/10 for 8.5 pts.
Part 3
What are the total costs of the current policy?
Submit
Attempt 1/10 for 8.5 pts.
Part 4
What is the target cash balance according to the BAT model?
Submit
Attempt 1/10 for 8.5 pts.
Part 5
What is the total cost of the best policy?
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