ortunity 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 optimal cash conversion size? A.P60,000
Q: National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the…
A: Minimum level of cash (L) = P 25000 Standard deviation (SD) = P 2000 i = 7.5% per annum = 0.0205479%…
Q: National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the…
A: Return Point = {3*Transaction cost* (Standard deviation )2 / (4 *i/365)} + Minimum Balance T =Fixed…
Q: mekmek Corporation uses the Baumol Cash Model to determine its optimal cash balance. For the coming…
A: SOLUTION- BAUMOLS MODEL IS ONE OF THE CASH MANAGEMENT MODELS WHICH IS USED TO DECIDE HOW MUCH CASH…
Q: Parramore Corp has $12 million of sales, $1 million of inventories, $4 million of receivables, and…
A: The cash conversion cycle is a measure of estimating the time period for a corporation in which the…
Q: National Co.’s evaluation of its cash outlay required indicates that it needs 500,000 for the year.…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A firm has annual operating outlays of P1,800,000 and a cash conversion cycle of 60 days. If the…
A: Cash Conversion Cycle: The cash conversion cycle (CCC) is a statistic that represents the amount of…
Q: The Hedge Company has an average age of inventory of 65 days, an average collection period of 60…
A: The cash conversion cycle is calculated with the help of following formula Cash Conversion Cycle =…
Q: SLMA Corp. for the last ten years, has earned and had cash flows of about P600,000 every year. As…
A: Solution Given Cash flows every year 600000 Expenses every year 500000 Treasury bond…
Q: The Seattle Corporation has been presented with an investment opportunity which will yield cash…
A: Step 1: Payback period: represents the time period required for the recovery of the initial…
Q: Simile Inc. has a total annual cash requirement of P9,075,000 which are to be paid uniformly. Simile…
A:
Q: Alfarsi Industries uses the net present value method to make investment decisions and requires a 15%…
A: Present Value: The value of today’s amount to be paid or received in the future at a compound…
Q: DDR Corporation has a 12 percent opportunity cost of funds and currently sells on terms of net/10,…
A: Total amount to be received from the customer after 60 days on term net/10 is as follows: Resultant…
Q: Pena Company is considering an investment of $29,480 that provides net cash flows of $8,900 annually…
A: NPV :— NPV is one of the Capital Budgeting techniques which help to Find out whether project is…
Q: Galaxy Corp. is expected to generate a free cash flow (FCF) of $6,430.00 million this year (FCF₁ =…
A: Since you have asked multiple questions, we will solve the first question for you as per policy.…
Q: Lux Co. would like to maintain its cash account at a minimum level of P25,000, but expect the…
A: Optimal upper cash limit means the limit where the cash balance is of the amount which is of ideal…
Q: National Co.’s evaluation of its cash outlay required indicates that it needs 500,000 for the year.…
A: when determining the optimal level of cash it is necessary to considered the opportunity as cost…
Q: The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can…
A: Two types of costs are involved in fund raising in this question: 1. Cost incurred in selling…
Q: The karson transport company currently has net operating income of $508,000 and pays interest…
A: times interest earned = net operating income/interest expense
Q: If real gets a cash infusion of P1 million each time it needs cash, what are the total costs per…
A: As per Bartleby guidelines, in case of multi-part questions, we are only allowed to answer the first…
Q: RODEO, Inc., is purchasing machinery at a cost of $2,957,720. The company’s management expects the…
A:
Q: Margaret Company has an initial cost of investment amounting to P225,000 and expects the following…
A: The payback bailout period is the method that represents the period in which the total investment in…
Q: National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the…
A: Trading cost per transaction (F) = P 200 Standard deviation (S) = P 2000 Minimum level (L) = P 25000…
Q: ine will generate 568,000 per year in revenue and the direct o 7. Compute the payback period using…
A: Payback period is a capital budgeting technique used to evaluate various investment proposals. It is…
Q: The Seattle corporation has been presented with an investment opportunity that will yield cash flow…
A: Payback period is a method of evaluating project. It shows time period under which cost of the…
Q: Parramore Corp has $17 million of sales, $3 million of inventories, $2.25 million of receivables,…
A: Step 1: “Since you have posted a question with multiple sub-parts, we will solve first three…
Q: Pinocchio Inc. has a total annual cash requirement of P9,075,000 which are to be paid uniformly.…
A: Since you have posted a multipart question therefore we will solve the first three parts only.…
Q: ccaneer, Inc., has determined that it needs $10 million in cash per week. If Buccaneer needs…
A: Cash and its importance: Cash is the lifeline of a business, and all corporations aim to hold enough…
Q: Buccaneer, Inc., has determined that it needs $10 million in cash per week. If Buccaneer needs…
A: Demand=10000000 Cost per infusion=100 holding cost=0.2/100 =0.002
Q: A firm needs a total P30 million in new cash for transaction purposes. The annual interest rate on…
A: New cash needed (C) = P 30 million r = 12% Fixed cost (F) = P 1000
Q: Parramore Corp has $18 million of sales, $2 million of inventories, $3.5 million of receivables, and…
A: Since you have asked a question with multiple parts, we will solve the first 3 parts as per policy.…
Q: Bright paints Ltd. estimates its cash requirement as Rs.2,400,000/- next year. The company faces a…
A: Given that: Annual cash requirement = Rs. 24,00,000 Fixed conversion cost = Rs. 4000 Holding cost…
Q: The white oak company's annual sales are 219 million van average of 9 days elapses between when a…
A: GIVEN The white oak company's annual sales are 219 million van average of 9 days elapses between…
Q: Eaglet Company has a 12 percent opportunity cost of funds and currently sells on terms of net/10,…
A: Total amount to be received from the customer after 60 days on term net/10 is as follows: Resultant…
Q: A corporation has $344 million in sales,$232 million in COGS, $53 million in inventory, $128 million…
A: Cash conversion cycle = [Average inventoryCost of goods sold + Average receivablesNet sales-Average…
Q: dbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell…
A: To determine the transactions costs (per month) associated with the cash infusions we first need to…
Q: The Carlo Company has been allocated RM600,000 on investment projects for the coming year. Four…
A: As per company policy it is only possible to solve one question.
Q: National Co.’s evaluation of its cash outlay required indicates that it needs 500,000 for the year.…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Your employer, Rubio LLC, is considering an investment in an office building that has the following…
A: Answers have been given on the next sheet
Q: The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can…
A: To determine the transactions costs (per month) associated the cash infusions we first need to…
Q: Sons Company Ltd estimated cash payments of Rs 60 Lakhs for a one-month period. The average fixed…
A: Cash flow planning is also aided by EOQ. Many small firms make the mistake of tying up too much…
Q: WOPPERS PLC, which currently has negligible cash holdings, expects to have to make a series of cash…
A: The term optimal cash balance is defined by Baumol and is commonly known as the Baumol Model which…
Q: Luthor Corp. is expected to generate a free cash flow (FCF) of $14,950.00 million this year (FCF: =…
A: given, WACC = 3.54% FCF 1=14950 million FCF2= 14950 x (1+23.8%) = $18508.1 million (as it grows at…
Q: Webster runs a $100,000 per month cash deficit,requiring periodic transfers from its portfolio…
A: Economic Order Quantity: Economic order quantity is the optimal quantity of inventory a company…
Q: Distinguish between hard and soft capital rationing
A: Capital Rationing is the strategy of picking up the most profitable projects to invest the available…
Q: A firm, whose cost of capital is 8 percent, may acquire equipment for $146,825 and rent it to…
A: Given: Particulars Amount Cost of capital 8% Acquire equipment $146,825 Years 5 Rent…
Q: Batangas Company estimates its total cash outlays at $160 million during the coming year. The…
A: Note: Hi! Thank you for the question As per the honor code, We’ll answer the first question since…
Q: SLMA Corp. for the last ten years, has earned and had cash flows of about P600,000 every year. As…
A: Shareholders are the owners of the share of the company. They participate in the important business…
Q: XYZ have estimated free cash flows of P2,200,000 on year 5 and assumes that the company’s cash flow…
A: Solution Given Cash flow on year 5 2,200,000 Growth rate 3% Discount rate 11%
ABC Inc. has a total annual cash requirement of P9,075,000 which are to be paid uniformly. ABC 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 optimal cash conversion size?
A.P60,000
B.P45,000
C.P55,000
D.P72,500
Step by step
Solved in 2 steps
- Lux Co. has a total annual cash requirement of P9,030,000 which are to be paid uniformly. Lux has the opportunity to invest the money at 21% per annum. The company spends, on the average, P30 for every cash conversion to marketable securities. What is the optimal cash conversion size?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 Conversion Cost?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
- 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?The following formula is used in determining its optimal level of cash. Assume that the fixed cost of selling marketable securities is P10 per transaction and the interest rate on marketable securities is 6% per year. The company estimates that it will make cash payments of P12,000 over a 1-month period. What is the average cash balance (rounded to the nearest peso)? (check the attached photo) choose the letter of the correct answer a. P1,732.00b. P3,464.00c. P6,928.00d. P8,660.00e. P15,588.00Buccaneer, Inc., has determined that it needs $10 million in cash per week. If Buccaneer needs additional cash, it can sell marketable securities, incurring a fee of $100 for each transaction. If Buccaneer leaves funds in its marketable securities, it expects to earn approximately 0.2% per week on their investment. 1. How much is the weekly opportunity cost of cash? (Use a number, must be in decimal form. eg. 6.3%/100, encode 0.063 , no commas, no currency, no space) * 2. How much is the total demand for cash per week? (Use a number, no decimal value, no commas, no currency, no space) *
- 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?Suppose NewBank decides to invest $273 million in30-day T-bills. The T-bills are currently trading at$4,981 (including commissions) for a $4,940 face valueinstrument. How many T-bills do they purchase? Whatdoes the balance sheet look like?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
- The Hedge Company has an average age of inventory of 65 days, an average collection period of 60 days and an average payment period of 65 days. The firm's total annual outlays for operating cycle investments are R3.65 million. Assuming a 365-day year, how much negotiated financing is required to support it cash conversion cycle?A firm needs a total P30 million in new cash for transaction purposes. The annual interest rate on marketable securities is 12% and the brokerage fee cost per transaction of selling securities to replenish cash is P1,000. Which of the following is closest to the firm’s optimal average cash balance?Stellar Shoes would like to maintain their cash account at a minimum level of $25,000, but expects the standard deviation in net dally cash flows to be $2,000; the effective annual rate on marketable securities to be 5 percent per year, and the trading cost per sale or purchase of marketable securities to be $100 per transaction. What will be their optimal upper cash limit? Multiple Choice $114,277.02 $38,092.34 $27,000 $64,27702