XYZ Corporation has a lower and an upper limit for its savings account at P40,000 and P70,000 respectively. Its optimal return point is P50,000. If as of the end of the day, XYZ has a cash balance of P13,000. How much should it request for additional funds or (invest in marketable securities)? Because its cash balance is less than the lower cash limit, XYZ should request for additional funds in the amount of:

XYZ Corporation has a lower and an upper limit for its savings account at P40,000 and P70,000 respectively. Its optimal return point is P50,000. If as of the end of the day, XYZ has a cash balance of P13,000. How much should it request for additional funds or (invest in marketable securities)? Because its cash balance is less than the lower cash limit, XYZ should request for additional funds in the amount of:

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 1P

See similar textbooks

Similar questions

XYZ Corporation has a lower and an upper limit for its savings account at P40,000 and P70,000 respectively. Its optimal return point is P50,000. If as of the end of the day, XYZ has a cash balance of P18,000. How much should it request for additional funds or (invest in marketable securities)? Because its cash balance is less than the lower cash limit, XYZ should request for additional funds in the amount of:
ABC Corporation has a lower and an upper limit for its savings account at 40,000 and 70,000 respectively. Its optimal return point is 50,000. If as of the end of the day, ABC has a cash balance of 13,000. How much should be it request for additional funds or onvest in marketable securities? Because its cash balance is less than lower cash limit, ABC should request for additional funds in the amount of:
mekmek Corporation uses the Baumol Cash Model to determine its optimal cash balance. For the coming year, the expected cash disbursement total to P432,000. The interest rate on marketable securities is P8 per transaction. Using 5% carrying cost rate, what is the optimal cash balance of the company? A. 1,175.76 B. 5,878.78 C. 11,757.55 D. 142,000
National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal cash return point?
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 upper cash limit? (Round your answer to the nearest dollar amount.) $55,100 $72,328.32 $111,859.83 $74,575.50
Lux Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal upper cash limit
Ekrita’s evaluation of its cash outlay required indicates that it needs 200,000 for the year. Regardless, of the amount. It incurs 50 to convert Marketable Securities to Cash. The Marketable Securities earn an annual rate of 5%. Lemon does not maintain buffer cash. How much is the Optimal Transaction Size? How much is the Annual Holding Cost as a result of keeping Cash in Bank? How much is the Total Annual Cost of Cash?
Lemon’s evaluation of its cash outlay required indicates that it needs 200,000 for the year. Regardless, of the amount. It incurs 50 to convert Marketable Securities to Cash. The Marketable Securities earn an annual rate of 5%. Lemon does not maintain buffer cash. A. How much is the Optimal Transaction Size? B. How much is the Average Cash Balance? C. How much is the Annual Holding Cost as a result of keeping Cash in Bank?
If average daily remittances are $1 million, and extended disbursement float adds 12 days to the disbursement schedule, how much should the firm be willing to pay for a cash management system if the firm earns 15% on excess funds?
The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the holding costs associated with its cash investment?
The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise fundsas additional notes payable and use them to increase inventory. How muchcan Nelson’s short-term debt (notes payable) increase without pushing itscurrent ratio below 2.0? What will be the firm’s quick ratio after Nelson hasraised the maximum amount of short-term funds?
Simile Inc. has a total annual cash requirement of P9,075,000 which are to be paid uniformly. Simile has the opportunity to invest the money at 24% per annum. The company spends, on the average, P40 for every cash conversion to marketable securities. What is the Total Opportunity Cost of keeping cash in the bank?