The following formula is used in determining its optimal level of cash. Assume that the fixed cost of selling marketable securities is P10 per transaction and the interest rate on marketable securities is 6% per year. The company estimates that it will make cash payments of P12,000 over a 1-month period. What is the average cash balance (rounded to the nearest peso)? (check the attached photo) choose the letter of the correct answer a. P1,732.00 b. P3,464.00 c. P6,928.00 d. P8,660.00 e. P15,588.00

The following formula is used in determining its optimal level of cash. Assume that the fixed cost of selling marketable securities is P10 per transaction and the interest rate on marketable securities is 6% per year. The company estimates that it will make cash payments of P12,000 over a 1-month period. What is the average cash balance (rounded to the nearest peso)? (check the attached photo) choose the letter of the correct answer a. P1,732.00 b. P3,464.00 c. P6,928.00 d. P8,660.00 e. P15,588.00

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...

See similar textbooks

Similar questions

Which of the following discounts future cash flows to their present value at the expected rate of return, and compares that to the Initial Investment? A. internal rate of return (IRR) method B. net present value (N PV) C. discounted cash flow model D. future value method
Fundamentals of Engineering Economy (8012101-2) Based on the interest rates and cash flows shown in the cash flow diagram, determine the value of $X.
What is the internal rate of return of the following cash flow diagram? a. 20.0% b. 18.2% c. 17.5% d. 15.0%.
Fundamentals of Engineering Economy Consider the cash flow transactions depicted in the accompanying cash flowdiagram, with the changing interest rates specified. What is the equivalent presentworth?
Determine the PW (Present worth) at 8% of the given cash-flow diagram. Use MS Excel
16 Statement of financial position information is useful for all of the following except to Group of answer choices compute rates of return evaluate capital structure assess future cash flows analyze cash inflows and outflows for the period
Consider the calculation of an external rate of return (ERR). The positive cash flows in the cash flow profile are moved forward to t = n using what value of i in the (F|P,i,n–t) factors? a. 0 b. The unknown value of ERR (i′) c. MARR d. IRR.
Consider the cash flow transactions depicted in the accompanying cash flow diagram, if the value of B=$1200, the present value P is closest to:
What is the present worth for the investment represented by the given cash flow? Interest is 12%.
Please answer the following question. In this method, the company compares the amount spent on the investment with the discounted expected future cash inflows. a.Payback b.NRV c.Investment d.IRR
Find the present worth of the following cash flow diagram if i = 8 %.
The ____ of an investment is the period of time for the ____ to equal the initial cash outlay. a. profitability index; present value of the cash inflows b. payback period; cumulative cash inflows c. payback period; present value of the cash inflows d. None of these are correct