Question

Hollywood shoes would like to maintain their cash account at a minimum level of $51,000, but expect the standard deviation in net daily cash flows to be $4,100; the effective annual rate on marketable securities to be 6.25 percent per year; and the trading cost per sale or purchase of marketable securities to be $110 per transaction. what will be their optimal cash return point? (round your answer to 2 decimal places.)

Answer 1

1> $55,100

2>$72,328.32

3>$111,859.83

4>$74,575.50