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Accounting

Problem:

HotFoot Shoes would like to maintain its cash account at a minimum level of $32,000, but expects the standard deviation in net daily cash flows to be $4,700, the effective annual rate on marketable securities to be 7.2 percent per year, and the trading cost per sale or purchase of marketable securities to be $270 per transaction.

Required:

Question: What will be its optimal cash return point?

Note: Please show basic calculation

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167372

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