Question: White Whale Corporation has an average daily cash balance of
White Whale Corporation has an average daily cash balance of $1,700. Total cash needed for the year is $64,000. The interest rate is 5 percent, and replenishing the cash costs $8 each time. What are the opportunity cost of holding cash, the trading cost, and the total cost? What do you think of White Whale’s strategy?
Answer to relevant QuestionsThe Anberlin Co. had $255,000 in 2011 taxable income. Using the rates from Table 2.3 in the chapter, calculate the company’s 2011 incometaxes.Debit and Credit Bookkeepers needs a total of $21,000 in cash during the year for transactions and other purposes. Whenever cash runs low, it sells $1,500 in securities and transfers the cash in. The interest rate is 4 ...Rise Against Corporation has determined that its target cash balance if it uses the BAT model is $5,100. The total cash needed for the year is $31,000, and the order cost is $10. What interest rate must Rise Against be using?The Trektronics store begins each week with 300 phasers in stock. This stock is depleted each week and reordered. If the carrying cost per phaser is $38 per year and the fixed order cost is $75, what is the total carrying ...Consider the following information about two alternative credit strategies:The higher cost per unit reflects the expense associated with credit orders, and the higher price per unit reflects the existence of a cash ...
Post your question