Part 2 Company M manufactures widgets for sale to retail outlets. The Board has set a minimum current bank account balance of $8,500. The average cost to the company of making deposits or selling investments is $18 per transaction and the standard deviation of its cash flows was $1,000 per day during the last year. The average interest rate on investment is 2.5%. Required: (c) Calculate the following values and explain their relevance to company M in managing the cash of the company: () Target cash balance (ii) Upper limit (iii) Value of investments that would be sold if the cash balance reached the lower limit. (9 marks) (d) Explain the factors that Company M should take into account when setting credit limits for new and existing customers who buy goods on credit. (7 marks) Part 2 Company M manufactures widgets for sale to retail outlets. The Board has set a minimum current bank account balance of $8,500. The average cost to the company of making deposits or selling investments is $18 per transaction and the standard deviation of its cash flows was $1,000 per day during the last year. The average interest rate on investment is 2.5%. Required: (c) Calculate the following values and explain their relevance to company M in managing the cash of the company: () Target cash balance (ii) Upper limit (iii) Value of investments that would be sold if the cash balance reached the lower limit. (9 marks) (d) Explain the factors that Company M should take into account when setting credit limits for new and existing customers who buy goods on credit. (7 marks)