How much lower would frozen vapor total cash balances be

Assignment Help Accounting Basics
Reference no: EM131708507

Question: Frozen Vapor. Frozen Vapor of Toulouse, France, manufactures and sells skis and snowboards in France, Switzerland, and Italy, and also maintains a corporate account in Frankfurt, Germany. Frozen Vapor has been setting separate operating cash balances in each country at a level equal to expected cash needs plus two standard deviations above those needs, based on a statistical analysis of cash flow volatility. Expected operating cash needs and one standard deviation of those needs are as follows:

738_22.png

Frozen Vapor's Frankfurt bank suggests that the same level of safety could be maintained if all precautionary balances were combined in a central account at the Frankfurt headquarters.

a. How much lower would Frozen Vapor's total cash balances be if all precautionary balances were combined? Assume cash needs in each country are normally distributed and are independent of each other.

b. What other advantages might accrue to Frozen Vapor from centralizing its cash holdings? Are these advantages realistic?

Reference no: EM131708507

Questions Cloud

Explain the rationale for computer forensic activities : Explain the rationale for computer forensic activities. Analyzing an E-mail Archive for an Electronic Discovery Investigation. Evaluate sources of evidence.
Which partys candidate are protestants more likely to vote : GIS 200 - Which president was most popular overall when elected and which party's candidate are Protestants more likely to vote
Define how do i influence someone with power : what is the best kind of power to have and How do I influence someone with power and make sure that my message gets through
Discuss the darker underside of motherhood : All of the good and bad qualities about her daughter truly make her the person she is and may even make her stronger because of them.
How much lower would frozen vapor total cash balances be : How much lower would Frozen Vapor's total cash balances be if all precautionary balances were combined? Assume cash needs in each country are normally.
How much cash could atsushi save by taking the discount : Atsushi Japan. Atsushi Japan, the Japanese subsidiary of a U.S. company has ¥100,000,000 in accounts receivable for sales billed to customers on terms of 2/30.
What would be net interest earnings of dalziel : What would be the net interest earnings (i.e., interest earned less interest paid, before administrative expenses), of Dalziel's in-house bank for April?
Discuss about the spread of buddhism in china : The spread of Buddhism in China brought changes in religious ideas and practices, changes in literature and art, and changes in the values.
Define what is the effectiveness of such global treaties : What is the effectiveness of such global treaties as The Kyoto Agreement to alleviate global environmental issues

Reviews

Write a Review

Accounting Basics Questions & Answers

  Englehart inc reports the following operating results for

englehart inc. reports the following operating results for the month of august sales 300000 units 5000 variable costs

  What is the incomplete revelation hypothesis

What is the role of auditing relative to the usefulness of accounting information?

  Process accounts reported in the balance sheet

Under the percentage-of-completion method, how are the Construction in Process and the Billings on Construction in Process accounts reported in the balance sheet?

  What is the purpose of calculating debt service coverage

What is the purpose of calculating debt service coverage?

  Procedures or requirements for the expenditure cycle

Listed below are 12 internal control procedures or requirements for the expenditure cycle (purchasing, payroll, accounts payable, and cash disbursements) of a manufacturing enterprise. For each of the following, identify the error or misstatem..

  Compute the overhead cost per unit for each product

Prepare a schedule showing the computations of the activity-based overhead rates per cost driver - prepare a schedule assigning each activity's overhead cost to the two products.

  Hot lunch delivery service has always had a policy to pay

hot lunch delivery service has always had a policy to pay stockholders annual dividends in an amount exactly equal to

  Which of the following is a variable cost

Which of the following is a variable cost

  The equipment has the following characteristics:

The Winsey Company purchased equipment on January 2, 2010, for $700,000. The equipment has the following characteristics:Estimated service life ......... 20 years 100,000 hours950,000 units of outputEstimated residual value ....... $50,000During 2010..

  Aberdeen corp uses activity-based costing system with three

aberdeen corp. uses activity-based costing system with three activity cost pools. the following cost information is

  What is the estimated amount of dollars

What is the estimated amount of dollars you will receive when converting the francs to U.S. dollars in one year at the spot rate at that time

  Stephen anest started a new business called repairs r us

stephen anest started a new business called repairs r us inc. at the beginning of the year. unfortunately stephen has

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd