Veggie Burgers, Inc. would like to maintain its cash account at a minimum level of $258,000 but expects the standard deviation in netdaily cash flows to be $13,300, the effective annual rate on marketable securities to be 4.4 percent per year, and the trading cost persale or purchase of marketable securities to be $34.00 per transaction.What will be its optimal cash return point? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2decimal places.)Optimal cash return point

Given:Minimum level of $258,000 = LStandard deviation of daily cash flows to be $13,300 = marketable…

"eggie Burgers, Inc. would like to maintain its cash account at a minimum level of $258,000 but expects the standard deviation in net aily cash flows to be $13,300, the effective annual rate on marketable securities to be 4.4 percent per year, and the trading cost per ale or purchase of marketable securities to be $34.00 per transaction. What will be its optimal cash return point? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Optimal cash return point

"eggie Burgers, Inc. would like to maintain its cash account at a minimum level of $258,000 but expects the standard deviation in net aily cash flows to be $13,300, the effective annual rate on marketable securities to be 4.4 percent per year, and the trading cost per ale or purchase of marketable securities to be $34.00 per transaction. What will be its optimal cash return point? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Optimal cash return point

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

s
he conventional payback period ignores the time value of money, and this concerns Cold Goose’s CFO. He has now asked you to compute Sigma’s discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer.) Year 0 Year 1 Year 2 Year 3 Cash flow -$5,000,000 $2,000,000 $4,250,000 $1,750,000 Discounted cash flow Cumulative discounted cash flow Discounted payback period: years Which version of a project’s payback period should the CFO use when evaluating Project Sigma, given its theoretical superiority? The discounted payback period The regular payback period One…
WOPPERS PLC, which currently has negligible cash holdings, expects to have to make a series of cash payments totalling $3 000 000 over the forthcoming year. These will become due at a steady rate and can be met by making periodic sales from existing holdings of short-term securities. According to the company’s financial advisors, the most likely average percentage rate of return on these securities is 9% over the forthcoming year, although this estimate is highly uncertain. Whenever the company sells securities, it incurs a transaction fee (T) of $50. Calculate the optimal cash balance for the company What is the optimal number of times Welders should sell securities? . Determine the cost of holding cash resulting from this policy.
Please help me answer this. Thank you.
HJK Corporation's demand for cash during a year's time is $500,000. Each time HJK sells securities to raise cash, it pays a brokerage commission of $10. The interest rate HJK earns on the securities is 4% per year 9 How much in securities should HJK sell I each time it sells securities to minimize its costs of holding the cash instead of the securities and to minimize its brokerage commissions? *
Webster runs a $100,000 per month cash deficit,requiring periodic transfers from its portfolio ofmarketable securities. Broker fees are $32 pertransaction, and Webster earns 7% on its investment portfolio. How can Andria use the EOQmodel to determine how Webster should liquidatepart of its portfolio to provide cash?
The A Company wishes to apply the Miller-Orr model to manage its cash investment. A's management has determined that the cost of either investing in or selling marketable securities is $200. By looking at A Company’s past cash needs, they have determined that the variance of daily cash flows is $10,000. A Company’s opportunity cost of cash, per day, is estimated to be 0.05%. A management has figured, based on their experience dealing with the cash flows of the company, that there should be a cushion— a safety stock—of cash of $20,000. Calculate the lower limit, the return point, and the upper limit based on the Miller-Orr model of cash management.
Kale Inc. forecasts the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 11.0% and FCF is expected to grow at a rate of 4.0% after Year 2, then what is the firm’s total corporate value (in millions)? Do not round intermediate calculations. Year0 FCF -$40 Year 1 FCF $150
Veggie Burgers, Inc. would like to maintain its cash account at a minimum level of $247,000 but expects the standard deviation in net daily cash flows to be $12,200, the effective annual rate on marketable securities to be 4.9 percent per year, and the trading cost per sale or purchase of marketable securities to be $28.50 per transaction. What will be its optimal cash return point? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Optimal cash return point
WhiteScreen LLC is evaluating Project T, which requires an initial investment of RO 18000. The expected net cash flows are RO 5000 pa for four years at today’s prices. However, these are expected to rise by 5.5% pa because of inflation. The firm’s cost of capital is 15%. What is the NPV for Project T being evaluated by WhiteScreen LLC using the discounting real cash flows? -1802 -2803 2500 14792
Use Microsoft Excel for calculate this question
The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next four years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 $100,000 $20,000 $330,000 $450,000 The Cro of the company believes that an appropriate annual interest rate on this investment is 4%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? O $1,650,000 O 2,000,000 O $792,676 O $450,000

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS