What will be optimal cash replenishment level

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Reference no: EM131890221

1. HotFoot Shoes would like to maintain its cash account at a minimum level of $33,000 but expects the standard deviation in net daily cash flows to be $2,800, the effective annual rate on marketable securities to be 4.3 percent per year, and the trading cost per sale or purchase of marketable securities to be $280 per transaction.

What will be its optimal upper cash limit? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places.)

optimal cash limit ___________________

2. Rose Axels faces a smooth annual demand for cash of $5.05 million, incurs transaction costs of $280 every time the company sells marketable securities, and can earn 4.8 percent on its marketable securities.

What will be its optimal cash replenishment level? (Enter your answer in dollars not in millions. Round your answer to 2 decimal places.)

Optimal cash $

Reference no: EM131890221

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