Explaining cash management firm-s-opportunity cost is given

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Reference no: EM1310711

Q1) Don’s Sons Company has been offered by its bank to manage its cash at the cost of= $35,000 per year.

Under proposed cash management, firm can decrease cash needed on hand by $180,000.

As the bank is also doing lot of record keeping, firm’s administrative cost would reduce by $2,000 per month. What suggestion would you provide firm with respect to proposed cash management suppose the firm’s opportunity cost is 12%?

Q2) Sharon utilizes 35 baskets each day to pack apples for shipping. It takes 5 days to get a shipment of baskets after the order is placed and she would like safety stock of 3 days in inventory. At what level of inventory must Sharon place the order for baskets?

Reference no: EM1310711

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