ASSIGNMENT #2. Compute for the following problems. Show all necessary computations. Round-off to Two (2) decimal places your solutions. Hand Written Solutions and form submission ( 30 points) 1. The management of the Book Warehouse Company wishes to apply the Miller-Orr model to manage its cash investment. They have determined that the cost of either investing in or selling marketable securities is $100. By looking at Book Warehouse's past cash needs, they have determined that the variance of daily cash flows is $20,000. Book Warehouse's opportunity cost of cash, per day, is estimated to be 0.03%. Based on experience, management has determined that the cash balance should never fall below $10,000. Calculate the lower limit, the return point, and the upper limit based on the Miller-Orr model of cash management. 2. The Seminole Company wishes to apply the Miller-Orr model to manage its cash investment. Seminole's management has collected the following estimates: Cost per transaction = $200 Variance of daily cash flows = $10,000 Opportunity cost of cash, per day = 0.05% Seminole management has figured, based on their experience dealing with the cash flows of the company, that there should be a cushion- a safety stock-of cash of $20,000. Calculate the following: a. the lower limit b. the return point c. the upper limit 3. 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 eam approximately 0.2% per week on their investment. Using the economic order quantity model, how much cash should Buccaneer raise from selling securities