Veggie Burgers, Inc. would like to maintain its cash account at a minimum level of$254,000 but expects the standard deviation in net daily cash flows to be $12,900, theeffective annual rate on marketable securities to be 4.6 percent per year, and the tradingcost per sale or purchase of marketable securities to be $32.00 per transaction.What will be its optimal upper cash limit? (Use 365 days a year. Do not roundintermediate calculations. Round your final answer to 2 decimal places.)

Given:Minimum cash balance (H) = $254,000Standard deviation of net daily cash flows (σ) =…

Answered: Veggie Burgers, Inc. would like to…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter23: Other Topics In Working Capital Management

Section: Chapter Questions

Problem 11MC

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