What will be the optimal cash return point

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Reference no: EM132531620

Question 1: Hollywood Shoes would like to maintain their cash account at a minimum level of $52,000, but expect the standard deviation in net daily cash flows to be $4,200; the effective annual rate on marketable securities to be 6.50 percent per year; and the trading cost per sale or purchase of marketable securities to be $120 per transaction. What will be their optimal cash return point? (Round your answer to 2 decimal places.)

Multiple Choice

Option 1: $73,063.37

Option 2: $72,954.45

Option 3: $75,384.53

Option 4: $56,200.00

Reference no: EM132531620

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