Goodwill company has been offered by its bank to manage its cash at a cost P35,000 per year. Under the proposed cash management , the firm can reduce the cash required on hand by P180,000. Since the bank also does a lot of record – keeping. The firm administrative cost will decrease by P2,000 per month. What should be the recommendation to the firm with respect to the proposed cash management assuming the firm opportunity cost is P12%?
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- 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. 1. Using the Baumol model, how much would be the Sandbox’s minimum total costs associated with cash infusion? 2. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the holding costs associated with its cash investment? 3. Using the Baumol model, what level of cash infusion minimizes Sandbox’s costs associated with cash?Benson Corporation is considering an investment in equipment that would cost $50,000 and provide annual cash inflows of $14,000. The company's required rate of return is 9%; the internal rate of return for the investment is 10.5%. Should the company make this investment?A. Yes, since the internal rate of return is less than the company's required rate of return. B. No, since the internal rate of return is less than the company's required rate of return. C. Yes since the internal rate of return is more than the company's required rate of return. D. The answer cannot be determined.5. A. Anthony & Sons Concrete Company has been offered by its bank to manage its cash at a cost of $35,000 per year. Under the proposed cash management, the firm can reduce the cash required on hand by $180, 000, Since the bank is also doing a lot of record keeping, the firm's administrative cost would decrease by $2, 000 per month. What recommendation would you give the firm with respect to the proposed cash management assuming the firm's opportunity cost is 12 percent?
- The financial manager of Sarap Corporation wants to determine the amount of cash atlays to be spent for the next period. He asked the help of the accountant and the lattes provided a cash budget for the next year According to the computation, the company would be incurring cash expenses of P6,612,500 per month. The financial manager has estimated a cost of P40 per transaction in case non-cash asset is converted to cash. The firm's opportunity cost ratio is 12% a) the optimum cash tufence is? b) The average cash balance is? c) the number of conversion made during the year? d) The total cash cost is? Please help me with these. Thank youuuu!A company spends on average €75,000 per week to pay its bills and maintains a lower cash balance limit of €40,000. The applicable interest rate is 6.12 percent and the fixed cost of transferring funds is €32. What is the optimal initial cash balance based on the BAT modelBuccaneer, 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 total demand for cash per week? 2. Using the Baumol Model, how much cash should Buccaneer raise from selling securities each week to minimize its costs of cash?
- Data on Nathan Enterprises has determined that it needs Php 7.8 million in cash per week. If Data on Nathan Enterprises needs additional cash, it can sell marketable securities, incuring a fee of Php 500 for each transaction. If Data on Nathan Enterprises leaves funds in its marketable securities, it expects to earn approximately 0.6% per week on their investment. Using the economic order quantity model, how much cash should Data on Nathan Enterprises raise from selling securities each week to minimize its costs of cash? 5.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. 1. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the transactions costs per month associated its cash infusions? 2. If Sandbox gets a cash infusion of P1 million each time it needs cash, how many transactions would be associated with its cash investment?A firm collects $60 million at an annual rate (252 days) which is expected to remain at that same level. The bank could establish a system that would save the firm 5 days in mail float, 2 days in processing float and $45,000 in annual clerical fees. The bank would charge a flat fee of $120,000.00 for this service. The firm’s money market account could earn an annual rate of 6% return. Prepare a benefit/ cost calculation to determine if the company should go ahead with the proposed system.
- Buccaneer, 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. Calculate for the cash infusion of 2 million or 3 million then solve for Transaction Cost and Holding Cost.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 transactions costs per month associated its cash infusions?The Real Company has cash needs of P5 million per month. If real needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If real leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. If real gets a cash infusion of P1 million each time it needs cash, what are the total costs per month associated its cash infusions? If real gets a cash infusion of P1 million each time it needs cash, how many transactions would be associated with its cash investment? If real gets a cash infusion of P1 million each time it needs cash, what are the transactions costs per month associated its cash infusions? how much would be the real's minimum total costs associated with cash infusion? If realgets a cash infusion of P1 million each time it needs cash, how much would be the average cash balance associated with its cash investment? If real gets a cash infusion of P1 million each time it needs cash, what are…