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The minimum cash balance for Delaware's main bank account is P500,000. It has a daily cash variance of P450,000 while the annual opportunity cost keeping cash in that account is 7%. On average, it costs Delaware P50,000 to each request for additional cash. Using the control limit model, how much would the upper cash balance limit be? * P506,223.70 P518,671.10 P544,274.07 P632,822.20

The minimum cash balance for Delaware's main bank account is P500,000. It has a daily cash variance of P450,000 while the annual opportunity cost keeping cash in that account is 7%. On average, it costs Delaware P50,000 to each request for additional cash. Using the control limit model, how much would the upper cash balance limit be? * P506,223.70 P518,671.10 P544,274.07 P632,822.20

Essentials Of Investments
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
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The minimum cash balance for Delaware's main bank account is P500,000. It has a daily cash variance of P450,000 while the annual opportunity cost keeping cash in that account is 7%. On average, it costs Delaware P50,000 to each request for additional cash. Using the control limit model, how much would the upper cash balance limit be? *

P506,223.70

P518,671.10

P544,274.07

P632,822.20

Required: Solution and explanation
Topics Covered: Working Capital Management

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