question 1 required

1. Mention and discuss one reason each why the cash management expert wants Dream Gems & Jewellery to set cash balances to (H) and (L), thereby culminating the company to move (H Z) and (Z L) BD, respectively?

pplagiarism will be used

The project is a team project of Masimam 6 inasent. Droen dions \& Acwelkry is a new SME sende itown is operation for four yoan row) that poomices kocn conpotion in the Giem and Jewellery indotry. for emyetion include Vaseen Gerne \& Arwillery and edwer sho are deing witl is the infetry Dration Geen os dewallery operations hecame profitable in the firit tuo yean entil the manogen decidel to open another beanch in a busy shopping eetire in Mlaamu. The epeniag of the acu tratch aw trometaloes flucvation in cach flowy they find it dathicull manegiag the each. flows te enuect they bold 5 makh canh in thek trincaction ascounter thas the cash in left idh for duys. On othor traing drys, they puikly rua eus of caih to pory waplives. and they do not aloo have maragen have become worried about the attation and minagenani systent put in plase, they risk boing fieir busines modet. Theit compatilars will take advantage ant crewl them out of haninas. In a coetultstive mecting beld as addess fie siturion, they dexivions to neb the problose in the hat Amsing the crikical devioins talen insilubes the fodlowing: 1. Eream Gims \& Jcwillery showld sel the keor cash limet (L.) and wper \&ach fimit 401 wo than any time the each limit beaches ary of thove poirs, it will trigact the eompany to mave (HZ) and (Z1b BD neipostincly. ii. The fitancial managememi expet analysol the himherical set can flews of Dream Gems of Jchellary and conpused the variance of the daily cash flews to be 1500000 BD. The masdent deviation is aden wals acouar for tove daily variasce. ii. The cost Ner transaction for huging and stling murketahle spourities F;, is asumnod to be fixol, at it. The oppostanily cont for holling cast in a year a 8. b.5. The inkerest fate and the varianoe are all buicel on fhe same knpth of tine. t. The solerable lower saih limit (L.) has been neblinhed 2,000BD v. The cask flow mosemost is coplained in the grapt below Cash Mesement in The MMer-Orr Mloded As a student of finance shadying wodkete eapial manyoment, you see reyuited to anulyse the indorminion abore atd alvise Drean Gems \& lencllery basod en the followisg eClovs: 1. Mration and decess ere reasen each wby the aach wh cash halances so (II) and (Li therelty culminating the 2. What in the squead or cash return paint frod that will net move the caih above filt - Z) of (Z L. E Explain pout answet. 3. What in the uppir casl limit (H) that will be noodol wo enable the conpiny wo move (14 - D BD wo puchase secturitice? Way is the amoual in HD the will lac perded wo iavest in secueities? Esplain your anwer. 4. If the Millen-in soumptions we zalis, what is the avorege cash reien than will allow the opergany to remain is ligulityete Eoplais yeur answir. 5. Asuming Drean Ciams k. Arwellery dros not underatant the runchor of nocuritiss to purchase in a yoar if they forecaet the cauh Gisturemant to be coual to the daily variance. Hos rany securily ales will the conctramy have in a yeir thul will belp toem to plan ahoul? 6. Derenbe whal will happen ob the bout cash limit, the apper cash liztit, ind the spread fithe diutance betooes the Two if the varirios in act inh powa. Give an iataitive cqulanation for why this kaypens. What happen