What will be their optimal upper cash limit

Reference no: EM13270042

Hollywood Shoes would like to maintain their cash account at a minimum level of $50,000, but expects the standard deviation in net daily cash flows to be $4,000; the effective annual rate on marketable securities to be 6 percent per year; and the trading cost per sale or purchase of marketable securities to be $100 per transaction. What will be their optimal upper cash limit?

$59,094.77
$69,588.47
$108,765.41
$54,000.00

Reference no: EM13270042

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