Increasing company holdings of marketable securities

Assignment Help Business Management

Reference no: EM1378167

A firm is currently holding $800,000 in cash. It assignments that over the next year its cash outflows will exceed its cash inflows through $345,500 every month. Each time securities are bought or sold through a broker, the company pays a fee of
$500. The annual interest rate on money-market securities is 7 percent.

a. How much cash should be retained and how much should be used to increase the company's holdings of marketable securities?

b. After the initial investment of excess cash, how many times during the next 12 months will securities be sold?

Reference no: EM1378167

Questions Cloud

Analysis of the vioxx drug case : This project needs that we submit an eight-fifteen page PowerPoint Presentation on the Viox Drug Case, and the use or misuse of this drug.

Capital assets : Determine the potential problems that can exist when comparability of asset conditions cannot be made within an agency and with other agencies. Suggest how these problems may be minimized

Describe which method you believe is the most popular : Describe which method you believe is the most popular and state why. Deliberate the different ways that retail institutions are evolving.

Agree or disagree with the smoothing treatment : Explain whether you agree or disagree with the "smoothing" treatment related to pension gains and losses, and state your rationale.

Increasing company holdings of marketable securities : A firm is currently holding $800,000 in cash. It assignments that over the next year its cash outflows will exceed its cash inflows through $345,500 every month.

After receiving the confirmation ollie wrote back stating : Six weeks after receiving the confirmation Ollie wrote back stating that he had not agreed to the price of $2.50 per pound. Is Ollie bound to the confirmation?

Determined overhead rate for the year : actual manufacturing overhead was $181,500. The pre - determined overhead rate for the year must have been

What would angie price each cookie : Angie prices the cookies at $3.56 each. Suppose that Angie can sell cracked cookies for $1.10 each. What could Angie price each cookie?

Calculate barron''s criticism of comdisco''s accounting : Calculate Barron's criticism of Comdisco's accounting and the company's response. Do you approve with the company or Barron's?

User Account

All Pages