Explain with reference to the strategies available to the firm for financing its working capital. A company
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Question:
Explain with reference to the strategies available to the firm for financing its working capital.
A company has set the minimum cash balance at Sh.10, 000. The interest rate on marketable able securities is 9% p.a. standard deviation of daily cash flows is sh.2500 and transaction costs. For every sale or purchase of marketable securities is sh. 20.
Assume a 360 days' year.
Required:
(i) Compute the target cash balance.
(ii) Compute the upper-limit, average cash
(iii) State the company's cash decision rule.
Related Book For
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn
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