Green Company uses the Baumol model to manage its disbursement account. Monthly cash disbursement is P1,200,000. Cash in this account could have earned 5% on money marketable securities. Green incurs P576 every time cash is transferred to this account. The optimum cash balance is A. 576,000.00 B. 166,276.88 C. 124,707.66 D. 432,000.00
Q: fane has $1L025 and plan to purchase a 5-year certificate of degosit KD tht y interest, conmpounded ...
A:
Q: First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City ...
A: Compound interest is the additional interest earned on the reinvested amount. It is interest on inte...
Q: Rank the following from highest present value to lowest present value. A payment of $5000 to be rece...
A: Option 1. Payment of 5000 N = 5 Option 2. Payment of 5000 N = 2 Option 3. Payment of 2000 in 1 y...
Q: One of the most important implications of our discussion of risk and return is the benefit of: O tak...
A: There are two aspects of investment one is return and other is return and there should be proper mix...
Q: the formula find the monthly payment of an ordinary if the present value is P18,500 with an intere...
A: Present value of money is that equivalent money that includes interest and principal amount. That is...
Q: 1. In 1993 the average tuition for one year at an Ivy League school was $11,800. 30 years later in 2...
A: Annual cost in 1993 (P) = $11800 Annual cost in 2013 (F) = $23700 Period (n) = 30 Years
Q: What is the value of the bond?
A: Bond: It is a debt instrument issued by the company from the investors to raise capital for the purp...
Q: Reading futures prices. Refer to Exhibit 7.2 for futures prices.a. What is the March 2012 futures pr...
A: Currency futures are futures contracts traded through exchange that shows us the price of one curren...
Q: You want to be able to withdraw $25,000 from your account each year for 25 years after you retire. Y...
A: Here, Withdrawal Amount is $25,000 Time Period of Withdrawal (Withdrawal Period) is 25 years Time P...
Q: Assuming a market rate of 7.6% over all maturities, the current yield of a bond with a coupon rate o...
A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to finan...
Q: Suppose the real rate on your investment is 9.5 percent and the inflation rate is 2.6 percent. What ...
A: Real Rate: It is the rate which the investor would receive by investing the money. The real rate of...
Q: Curtis Corporation's noncallable bonds currently sell for $1,165. They have a 15-year maturity, an a...
A: The yield to maturity is the return to an investor on a bond purchased by him if he holds the bond t...
Q: d) Calculate Leland's cost of common equity using the Security Market Line.
A: Calculate the beta of the stock (β) by dividing the covariance of stock with the market (Cov L,M) wh...
Q: Denver, Incorporated, has sales of $27 million, total assets of $24.9 million, and total debt of $5....
A: Net Income refers to the accounting profit amount which a company has left out with after making pay...
Q: Henry Josstick has just started his first accounting course and has prepared the following balance s...
A: Balance sheet of the financial statements represents all the asset, liabilties and shareholder equit...
Q: An interest-bearing note for 118 days at 6.4% p.a. simple interest has a face value of $4053. If the...
A: Notes are issued to discount that is interest and number of days to maturity of note. Proceeds from ...
Q: 1. Over the past year, your friend Maura has been saving up for an epic road trip to travel across t...
A: Sound Financial Decisions are those decisions which are taken or which exhibits strength in the area...
Q: SITUATION 4: A forklift is worth P10.2M. It has a lifetime of 11 years and has a salvage value of 3....
A: Depreciation:- It is the reduction in cost due to normal wear and tear and effluxion of time. There ...
Q: Darien invests $10,000 in an account that pays 3.2% interest per year, compounded semi-annually. Wha...
A: The amount of money after 3 years can be calculated with the help of future value function.
Q: Today, earnings per share (EPS) for AT& E is $4.45. Ten years ago it earned $0.50 per share. What wa...
A:
Q: What is the criticism for using SMB and HML as risk factors?
A: The Fama and French Three-Factor Model (or Fama French Model for short) is an asset pricing model de...
Q: Which of the following investment alternatives would provide the greatest ending wealth for your inv...
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions a...
Q: Which of the following statements about budgeting is incorrect? a. Budgets provide direction and coo...
A: a ) Budgets provide direction and coordination. This statement is correct because budgeting hel...
Q: On December 30, Year 1, ABC Corporation sold a machine to DEF Corporation in exchange for a non-inte...
A: Annual payment (A) = P 10000 n = 10 payments r = 8%
Q: $10,000 is paid as an annual dividend to shareholders, market value of shares is $100,000. The next ...
A: The Gordon growth model is the method of calculating the expected return through the information on ...
Q: In 2020, the two bend points for computing Social Security’s Primary Insurance Amount (PIA) are $960...
A: Primary Insurance Amount is one of the parts of Social Security Rules in the US. This is a kind of b...
Q: A stock has had the following year-end prices and dividends: Year Price Dividend $ 64.33 71.20 1 2 $...
A: Return means earning additional investment amount during the period. Return can be in the form of re...
Q: You found that opening your own cake shop is a worthwhile project. After scouting around you found o...
A: Capital Budgeting is required to evaluate whether to continue with an investment decision or not. Th...
Q: Ashely Corporation has 80 million outstanding equity shares and the following projected financial in...
A: We need to find the free cash flows in year 1 to 4 Cost of capital (c) = 13% Number of shares = 80 m...
Q: On February 1, 20x1, TSR Co. sold machinery with historical cost of P3,000,000 and accumulated depre...
A: A debt with no stated interest rate is known as a noninterest-bearing note. However, a noninterest-b...
Q: Simon Company's year-end balance sheets follow. At December 31 2017 2016 2015 Assets $ 30,510 $ 36,3...
A: The current ratio is the measure of a company's ability to pay back its short-term debts. It is calc...
Q: . Mr. Formento pays at the end of every month for a loan that charges 5% inter ompounded quarterly. ...
A: There are many types of annuities depending on the payment at the end or beginning or whether it is ...
Q: 5.0 4.0 Nominal Interest Rate 3.0 2.0 Real Interest Rate 1.0 -1.0 2.0 -3.0 2003 2004 2005 2006 2007 ...
A:
Q: A. find the monthly payment of an ordinary if the present value is P18,500 with an interest rate of ...
A: A) Present value of annuity = P 18500 Interest rate = 10% quarterly compounded n = 6 years = 72 mont...
Q: Problem 6-21 Calculating Number of Periods [LO3] One of your customers is delinquent on his accounts...
A:
Q: You just inherited some money, and the end of each year for 20 years. You could earn 5% on your mone...
A: Data given:: PMT(Annuity) = $16800 i= 5% n= 20 years nper= 20 Required:: Amount you should pay fo...
Q: ABC company has 11% expected return on assets and pays 7% on its debt. The company debt represents 4...
A: Given, Return on assets is 11% debt to total assets is 40%
Q: What are the expected return and the standard deviation of return on in the optimal risky portfolio ...
A: Optimal risky portfolio is the portfolio that earns maximum returns at a minimum level of risk. It i...
Q: If interest rates increase because of a previously unanticipated inflation rate risk? long-liv...
A: Answer - If interest rates increase because of a previously unanticipated inflation rate risk as a ...
Q: Use PMT= to determine the regular payment amount, rDunded to the nearest cent. The cost of a home is...
A: EMI or monthly mortgage payments are the fixed amount paid by the borrower to the lender that includ...
Q: Sha Ico 3D
A:
Q: What are the short and long term goals for a finance student hoping to get an internship in consulti...
A: A finance intern usually assists the financial institution with basic tasks while learning about its...
Q: Use the Black-Scholes formula to find the value of the following call option. (Do not round intermed...
A: Stock Price $ 62.00 Exercise Price $ 62.00 Standard Deviation 40% Risk Free Rate 4% ...
Q: ou own a stock portfolio invested 16 percent in Stock Q, 24 percent in Stock R, 36 percent in Stock ...
A: Stock Weight Beta Q 16% 0.94 R 24% 1.00 S 36% 1.40 T 24% 1.85
Q: INV 1 4b You have invested in a portfolio of 60% in risky assets (Portfolio R) and 40% in T-bills. T...
A: The standard deviation of a portfolio is generally computed to measure the overall variation or disp...
Q: Plz solve it within 30-40 mins I'll give you multiple upvote
A: Mortgage are the loan which is taken by the individual to meet its financial requirements. The mortg...
Q: You are looking to invest in your company's 401(k) for your retirement. Their conservative plan boas...
A: The two-way data table: The two-way data table can be used to assess the impact of various combinati...
Q: Which of the following represents an Investing cash outflow? Select one: a. A decrease in Accounts ...
A: Cash flow statement A cash flow statement is the summary of cash flow which provides the details of ...
Q: Consider the following three cash flow series: End of Year Cash Flow Series A Cash Flow Series B Cas...
A: NPV or net present value of any investment is calculated in order to know the present value of serie...
Q: Pミキo, $10,000 n=? i =3% A= $1000
A: The question is based on the concept of present value for annuity payments. An annuity is a fixed su...
Green Company uses the Baumol model to
manage its disbursement account. Monthly
cash disbursement is P1,200,000. Cash in this
account could have earned 5% on
marketable
every time cash is transferred to this account.
The optimum cash balance is
A. 576,000.00
B. 166,276.88
C. 124,707.66
D. 432,000.00
Optimum Cash balance: It refers to that cash amount where total cost of the firm is lowest and opportunity cost of firm is equal to its transaction costs. It is the part of the cash management where two models are given to find out the optimum cash balance. One is Baumols model of cash management and other one is miller-orr model.
Step by step
Solved in 3 steps
- Nelto deposits $2,500 in a bank account that pays 3% interest compounded quarterly. Two years later, how much do they have in their bank account? C 1 t=0 n Cash Flow Diagram ….....…... Time Value of Money (TVM) Framework PV PMT FV type How to compute using Excel? -function( rate, nper, pmt, [PV]. [type]) n CPTBlue Corporation requires a P150,000minimum cash balance on its:checkingaccount. Based on the control limit model, itsspread should be P120,000. If as of the end ofthe day, the cash balance is P30,000, it shouldinfuse cash or (invest in marketablesecurities) amounting to : a. 160,000b. 190,000c. 240,000d. 120,000In reviewing the Accounts Receivable, the Net Cash Realizable Value is __ before a write off of $1500. What is the Net Cash Realizable Value after the write off?a. $16,000b. $1500c. $17300d. $14500
- note: can you help me answer the question for a, and b? For Nibong Prawn Paste Enterprise (NPPE), the average age of accounts receivable (AAR) is 60 days, the average age of accounts payable (AAP) is 45 days, and the average age of inventory (AAI) is 72 days. Assume a 365-day year. a. The length of the company’s cash conversion cycle (CCC) is? (days) b. Based on the CCC calculated in (a) above, if the forecasted sales turnover is $5 million the working capital requirement (WCR) of NPPE is? c. If NPPE is able to reduce its AAI to 65 days; maintain its AAR at 60 days, stretch its AAP to 60 days and maintain the same forecasted sales turnover of $5 million, the new CCC is _____ (days) and the new WCR is ______ (dollars) d. Which of the following are TRUE about the impacts of the change in the CCC of NPPE? A) The WCR would be reduced to $310,000 B) NPPE’s trade creditors can be said to be financing part of its WCR by allowing the company an extension of credit C) NPPE can also…Show the Bank’s balance sheet if the Bank purchases liabilities to offset a net deposit drain of $10 million (required reserves ratio 7%): Assets :Cash $10Traiding portfolio $15Loans $50Investment portfolio $25Liabilities and Equitites:Deposits $68Interbank loans $20Equity $12a. Paradise Retailers, Inc. (PRI) determined that $1,500,000 is needed for cash transactions made during the next year. Each time PRI deposits money in its checking account, a charge of $12.95 is assessed to cover clerical costs. PRI can hold marketable securities that yield 4.5%, and then convert these securities to cash at a cost of only the $12.95 deposit charge. Optimal Cash Amount = 29382.53 PRI’s financial managers have not been following the Baumol Model. Instead, they have been transferring cash from marketable securities less frequently, namely, transferring cash every three weeks. What total cash cost including holding costs and transactions costs could PRI save by transferring the optimal cash amount C* rather than this larger transfer amount?
- Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that: the money multiplier is 10. the money multiplier is 5. the money multiplier is 4. the money multiplier is 2. the money multiplier is 2.An amount of P1,000 is debited twice in the bank statement. When overdraft as per the cash book is the starting point? A. P1,000 will be added B. P1,000 will be deducted C. P2,000 will be added D. P2,000 will be deductedOn December 31, 2020, the cash account of Minerva Company has a debit balance of P906,000. An analysis if the cash account shows the following details: Undeposited collections 20,000 Cash in bank - PCIBchecking account 150,000 Cash in bank - PNB (overdraft) -12,000 Undeposited NSFcheck received from a customer, dated December 1, 2020 3,000 Undeposited check from a customer, dated January 15, 2021 7,000 Cash in bank - PCIB(fund for payroll) 40,000 Cash in bank - PCIB(savings deposit) 25,000 Cash in bank - PCIB(money market instrument, 90 days) 500,000 Cash in foreign bank (restricted) 25,000 IOUS from officers 8,000 Sinking fund cash 110,000 Listed stock held as temporary investment 30,000 Total 906,000 Cash and cash equivalents on Minerva's December 31, 2020 statement of financial position should be
- Find the new balance, assuming that the bank charges 1 1/2 % per month on the unpaid balance. (Round your answer to the nearest cent.) PreviousBalance Payment NewPurchases $134.31 $45 $73.98 $.On December 31, 2021, Alfonso Company had the following cash balances:Cash in bank, 15,000,000Petty cash fund, 50,000Time deposit 5,000,000Savings deposit 2,000,000Cash in bank includes P500,000 of compensating balance against short term borrowing arrangement at December 31, 2021. The compensating balance is legally restricted as to withdrawal by Alfonso. A check of P300,000 dated January 15, 2022 in payment of accounts payable was recorded and mailed on December 31, 2021. In the current assets section of the December 31, 2021 statement of financial position, what amount should be reported as “cash and cash equivalents”? 14,850,000 16,850,000 21,800,000 21,850,000VKS Company’s “cash count” as of December 31, 2021, is composed of the following:· Cash on Hand- P500,000· Demand Deposit- P2,000,000· Time Deposit, 30 days- P1,000,000· NSF Check of customer- P40,000· Money market placement (due June 30, 2022)- P1,500,000· Savings Deposit in a closed bank- P100,000· IOU from employee- P20,000· Pension Fund- P3,000,000· Petty Cash Fund- P10,000· Customer’s Check dated January 1, 2022- P50,000· Customer’s Check outstanding for 18 months- P40,000· Unused credit line- P500, 000 Additional information:a. Check of P200, 000 in payment of accounts payable was recorded on December 31, 2021 but mailed to suppliers on January 5, 2022.b. Check of P100, 000 dated January 15, 2022, in payment of accounts payable was recorded and mailed on December 31, 2021.c. The company uses the calendar year. The Cash Receipt Journal was held open until January 15, 2022, during which time P400, 000 was…