National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal cash return point?
National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal cash return point?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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34
Transcribed Image Text:National Co. would like to maintain its cash account at a minimum level of P25,000, but expect
the standard deviation in net daily cash flows to be P2,000; the effective annual rate on
marketable securities to be 7.5% per year, and the trading cost per sale or purchase of
marketable securities to be P200 per transaction. What will be their optimal cash return point?
Format: 11,111.11
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