What will be its optimal cash return point

Assignment Help Financial Management
Reference no: EM131302214

Veggie Burgers, Inc., would like to maintain its cash account at a minimum level of $251,000 but expects the standard deviation in net daily cash flows to be $12,600, the effective annual rate on marketable securities to be 5.3 percent per year, and the trading cost per sale or purchase of marketable securities to be $30.50 per transaction.

What will be its optimal cash return point? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Optimal cash return point $

Veggie Burgers, Inc., would like to maintain its cash account at a minimum level of $264,000 but expects the standard deviation in net daily cash flows to be $13,900, the effective annual rate on marketable securities to be 2.8 percent per year, and the trading cost per sale or purchase of marketable securities to be $37.00 per transaction.

What will be its optimal upper cash limit? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Optimal upper cash limit $

Reference no: EM131302214

Questions Cloud

What is its activity 5.00 y after manufacture : The β- particles emitted in the decay of 3 H (tritium) interact with matter to create light in a glow-in-the-dark exit sign. At the time of manufacture, such a sign contains 15.0 Ci of 3 H.
Discuss potential costs and benefits whenever appropriate : It is important that you discuss potential costs and benefits whenever appropriate, again keeping in mind that what might be beneficial for some parties or entities is likely to be costly to others.
Compare corporate social responsibility and ethics : List and discuss the traditional theories affecting security.Discuss the key areas for major concern.Compare corporate social responsibility and ethics.
What is the total price paid to the bondholder : A 6 percent corporate bond is callable in 10 years for a call premum of one year of coupon payments. Assuming a par value of 1,000, what is the total price paid to the bondholder if the issuer calls the bond?
What will be its optimal cash return point : Veggie Burgers, Inc., would like to maintain its cash account at a minimum level of $251,000 but expects the standard deviation in net daily cash flows to be $12,600, the effective annual rate on marketable securities to be 5.3 percent per year, and ..
Calculate the share price : Bill’s Bakery expects earnings per share of $3.14 next year. Current book value is $5.1 per share. The appropriate discount rate for Bill’s Bakery is 13 percent. Calculate the share price for Bill’s Bakery if earnings grow at 4.8 percent forever.
What is your opinion of labor unions : How is the culture of Fuji impacted by changes in the global environment? Describe and identify the level of global participation of this organization. What are some HR difficulties that may be found within Fuji? Provide a recommendation for impro..
A doppler power spectral density that has a gaussian shape : Synthesize an FIR filter for generating a complex Gaussian process with a flat power spectral density over a doppler bandwidth of 64 Hz and repeat the simulations given in MATLAB Example 1.
Abandon command and control styles of management : Complex theorists advise organizational leaders to abandon command and control styles of management and instead set global performance targets and establish a few simple rules. This approach can unleash creativity an innovation,

Reviews

Write a Review

Financial Management Questions & Answers

  What is the pv for both the options

You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $76,000 per year for the next two years, If the interest rate is 9 percent compounded monthly, what is the..

  Recommend interest rate effects

Recommend Interest Rate Effects and course of action for company based on analysis of market and influences of Federal Reserve system and use outside resources to support response. Explain how interest rates, security prices, and flow of funds intera..

  Loss of revenue due to employee theft

Erosion can be explained as the: A. additional income generated from the sales of a newly added product. B. loss of current sales due to a new project being implemented. C. loss of revenue due to employee theft. D. loss of revenue due to customer the..

  How long will it be before you have enough to buy car

You're trying to save to buy a new $192,000 Ferrari. You have $42,000 today that can be invested at your bank. The bank pays 5 percent annual interest on its accounts. How long will it be before you have enough to buy the car?

  The order of priority of claims in liquidation

The order of priority of claims in liquidation is firmly established in legal precedent. As depicted in Table 18.9 of the textbook, common shareholders are last in priority. Why might they do this? Do you believe it is a good idea? Explain.

  Compute the yield to maturity

Compute the yield to maturity of a $2,500 par value bond with a coupon rate of 7.5% (quarterly payments that is, four times per year) that matures in 25 years. The bond is currently selling for $3,265.rounded to one decimal place.

  Use the replacement chain approach to compute the NPV

You are evaluating two projects. You may accept only one of them. Project one will cost $379,000 initially and will pay $134,000 each year for the next 5 years. Project two will cost $454,000 initially, but will pay $101,000 for the next 10 years. Th..

  Free cash flows-determined that the EV-EBITDA for the firm

Next year free cash flows for the AA company is expected to be $10 million. It is expected to grow for the following two years at 10% and then for 9% for the following year. You have determined that the EV/EBITDA for the firm in year 5 is expected to..

  What is the net present value of investment

The firm is considering the purchase of a new machine. The machine costs $31,500 and will produce an after-tax cash flow of $5481 per year at the end of each of the next 9 years. The disposal of equipment will generate an additional cashflow after ta..

  Vertical axis is the payoff

Draw the payoff of each of the following portfolios in a diagram where the horizontalaxis is the share price of ABC and the vertical axis is the payoff. Buying one put option and one call option on ABC, both with strike price$40 and expiration next p..

  Absorb the risk by plowing back the capital surplus

If a firm that CANNOT issue new equity grows at a rate higher than SGR, which of the following MUST be true? They can absorb the risk by plowing back the Capital Surplus. Trick question: a firm cannot grow at a rate higher than SGR

  What about the ten-year bonds issued five years ago

Twenty-five years ago, the U.S. government issued thirty-year bonds with a coupon rate of about 8%. Five years ago, the U.S. government sold ten-year bonds with a coupon rate of about 5%. Suppose that the current coupon rate on newly issued five-year..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd