What will be walnuts average cash balance

Assignment Help Microeconomics
Reference no: EM131916066

Problem

1. Walnut Industries projects that annual cash usage of $3.75 million will occur uniformly throughout the forthcoming year. Walnut plans to meet these demands for cash by periodically selling marketable securities from its portfolio. The firm's marketable securities are invested to earn 5.2 percent, and the cost per transaction of converting funds to cash is $40.

A. Use the inventory model to determine the optimal transaction size for transfers from marketable securities to cash.

B. What will be Walnut's average cash balance?

C. How many transfers per year will be required?

Reference no: EM131916066

Questions Cloud

Determine the value at cetain rate per year : What is the value today of $4,100 per year, at a discount rate of 9 percent, if the first payment is received 5 years from today.
Briefly assess the equity of informal credit markets : Briefly assess the efficiency and equity of informal credit markets in light of your explanations.
Evaluate the relaxation in credit standards : Futon Company has been reviewing its credit policies. Evaluate the relaxation in credit standards that Futon is considering.
Explain the role of the financial manager in developing : At the first class meeting, six main principles of finance were discussed, which were underscored numerous times since the beginning.
What will be walnuts average cash balance : Use the inventory model to determine the optimal transaction size for transfers from marketable securities to cash. What will be Walnut's average cash balance?
What is annual interest rate that brown company should pay : Brown Company is short on cash and is attempting. What is the maximum annual interest rate that Brown Company should pay on borrowed funds? Why?
What areas are producer surplus at market equilibrium price : What area(s) are producer surplus at the market equilibrium price? Compared to the equilibrium, what area(s) do consumers lose if price is P2?
What is the value of consumer surplus at the given price : Use the market represented in to draw the consumer surplus when the market price is $8. What is the value of consumer surplus at this price?
Explain what is meant byembourgeoisement : Explain what is meant byembourgeoisement and proletarianisationusing example to illustrate your answer.

Reviews

Write a Review

Microeconomics Questions & Answers

  What circumstances would the production

Under what circumstances would the production possibility curve be bowed in towards the origin

  Determine that the manager invest in the rfid system

A grocery distribution center is considering whether to invest in RFID or bar code technology to track its inventory within the warehouse and truck loading.

  Consumer purchase to maximize her utility

A consumer's utility function is given by U(X,Y)=X*Y. The Consumer has $576 to spend. Px=16 & Py=4. How much X & Y should the consumer purchase to maximize her utility?

  Identify expected benefits and expected net gain

You own Eat My Crust Inc., a pizza crust manufacturing business. For each of the following scenarios, identify expected costs, expected benefits.

  How market structure differentiates from other alternatives

You may use the company you used for the Week 3 Learning Team assignment or you may select a new organization. Your selected organization must be submitted for instructor approval.

  What is the civilian labor force in this economy

Consider an economy that has 100,000 people that are 16 years old or older. 2,000 of this group are currently in the military. What is the civilian labor force in this economy? What is the number of unemployed people in this economy

  Explain the process by which you came to the conclusion

At a meeting with the manager, the accountant suggested raising the price of the hamburgers to $4.00 to improve the profit margin (P – AC). The manager noted that this would lead to a decline in sales, which would increase average cost even further.

  Identifying how did kevin plank get his idea for new product

Eleven years ago, Kevin A. Plank was a walk-on football player at the University of Maryland who relished throwing his body at hulking opponents.

  Who bears the cost of import barriers protecting a job

Who bears the cost of import barriers protecting a job where the industry employing labor has lost its comparative advantage Consider the use of tariffs on steel imports into the U.S. during the recent Bush Administration.

  Does there exist a pareto efficient equilibrium outcome

Is the equilibrium efficient? In your model, does there exist a Pareto efficient equilibrium outcome?

  Was such cross- subsidization in the public interest

Prior to 1982, AT&T kept local phone rates low by subsi- dizing them from long-distance profits. Was such cross- subsidization in the public interest? Explain.

  Evaluate the labor price and quantity variances

Compute the total labor variance. Compute the labor price and quantity variances. Repeat (b), assuming the standard is 4.1 hours of direct labor at $12.25 per hour.

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