An assistant manager at a local department store

Assignment Help Finance Basics

Reference no: EM13739311

Alexis Morris, an assistant manager at a local department store, gets paid every 2 weeks by direct deposit into her checking account. This account pays no interest and has no minimum balance requirement. Her monthly income is $4,200. Alexis has a "target" cash balance of around $1,200, and whenever it exceeds that amount, she transfers the excess into her savings account, which currently pays 2.0% annual interest. Her current savings balance is $15,000, and Alexis estimates that she transfers about $500 per month from her checking account into her savings account. Alexis doesn't waste any time in paying her bills, and her monthly bills average about $2,000. Her monthly cash outlay for food, gas, and other sundry items totals about $850. Reviewing her payment habits indicates that on average she pays her bills 9 days early. At htis time, most marketable securities are yielding about 4.75% annual interest.

Show how Alexis can better manage her cash balance.
a. What can Alexis do regarding the handling of her current balances?
b. What do you suggest that she do with her monthly surpluses?
c. What do you suggest Alexis do about the manner in which she pays her bills?
d. Can Alexis grow her earnings by better managing her cash balances? Show your work.

Reference no: EM13739311

Questions Cloud

Compare the sculptures of gudea and khafre : Compare the sculptures of Gudea and Khafre. Compare a Chinese pagoda, a Han watchtower, and an Indian stupa. Discuss the Japanese aesthetic for natural materials and give an example.

Eliminates exchange rate risk for both a and b. : The current exchange rate is $1.60 = €1.00. Company "A" is in Milan, Italy and wishes to borrow $1,000,000 at a floating rate for 5 years and company "B" is a U.S. firm that wants to borrow €625,000 for 5 years at a fixed rate of interest. You are a ..

Overall success of the organization : Suggest which HR function you believe to be the most important to the overall success of the organization. Provide one example to support your rationale.

Discuss theme of good shepherd in early christian art : Discuss the theme of the "good shepherd" in Early Christian and Byzantine art. What was its importance to Christians? How did it change over time?

An assistant manager at a local department store : Alexis Morris, an assistant manager at a local department store, gets paid every 2 weeks by direct deposit into her checking account. This account pays no interest and has no minimum balance requirement. Her monthly income is $4,200. Alexis has a "ta..

Discuss the legal requirements from the employer : Discuss the legal requirements from the employer's standpoint in regards to employee discipline, and provide examples of a situation related to each one.

What does a dragon symbolize in chinese art : What does a dragon symbolize in Chinese art? Use examples from specific artworks to illustrate. What makes Shen Zhou's Poet on a Mountaintop such an excellent example of literati painting during the Ming dynasty?

Explain message of van eycks portrait of giovanni arnolfini : Explain the message and meaning of van Eyck's Portrait of Giovanni Arnolfini and his Wife, Giovanna Cenami. Choose a work that best represents the High Renaissance

Explain ability of people to think and act as they choose : Process by which a government makes and carries out decisions. Ability of people to think and act as they choose. Form of democracy that protects the rights of the minority

User Account

All Pages