1. "How much money invested now at 8.2% interest would be sufficient to provide the following 3 payments: $33,000 exactly 4 years from now; $17,000 exactly 4 years from now; and $8,000 exactly 10 years from now? There is no inflation."

2. Slap Shot Corporation has a fixed cost associated with buying and selling marketable securities of $40. The interest rate is currently .013 percent per day, and the firm has estimated that the standard deviation of its daily net cash flows is $80. Management has set a lower limit of $1,500 on cash holdings. Calculate the target cash balance and upper limit using the Miller-Orr model.