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HotFoot Shoes would like to maintain its cash account at a minimum level of $40,000 but expects the standard deviation in net daily cash flows to be $3,500, the effective annual rate on marketable securities to be 3.0 percent per year, and the trading cost per sale or purchase of marketable securities to be $350 per transaction.

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Question: What will be its optimal upper cash limit?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167008

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