As a company is entering its peak season, its management considers investing surplus cash in marketable securities$.$ The company has $$600,000$ in cash and $$1,000,000$ in other current assets. It also has $$600,000$ in current liabilities, of which short$-$term notes payable is $$200,000.$ To avoid any liquidity issues, the management decides that its net operating working capital position $($NOWC$)$ will be no less than $$500,000$ after the investment, and the cash balance will be no less than $$100,000.$

How much should the company invest in marketable securities to maximize surplus cash management?

 

Answer rating: 100% (QA)

Heres how to calculate the maximum investment in marketable securities We can find the maximum inves... View the full answer