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HotFoot Shoes would like to maintain its cash account at a minimum level of $39,000 but expects the standard deviation in net daily cash flows to be $3,400, the effective annual rate on marketable securities to be 3.1 percent per year, and the trading cost per sale or purchase of marketable securities to be $340 per transaction. What will be its optimal upper cash limit? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Optimal upper cash limit $
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Show transcribed image text Jaguar Woodworking wants to purchase a new drill press for $81,000. The drill has a warranty that costs $450 for the first 4 years and $500 for the next 6 years. The new revenues from this drill press will be $10,000 annua..
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Adams operates his $25000 firm using his own equity. Bob operates his firm with $12500 of his own money plus $12500 of debt at a cost of 12 percent interest. Calculate Adams's and Bob's return on equity if their respective businesses produce earnings..
What is the equivalent annual savings from the purchase if Gluon uses straight-line depreciation? Assume the new machine will have no salvage value.
A company is considering a project with a cash break-even point of 31,422 units. The selling price is $39 a unit, the variable cost per unit is $27, and depreciation is $14,000. What is the projected amount of fixed costs?
The tax rate is 40 percent. What discount rate should API apply to the cash flows from "new" projects in the Financial Services Division?
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