Question 5

If current interest rate is 28%, a Treasury Bill with 91 days to maturity, and a face value of GH 50,000 should have a market value of? (5 marks)

Question 6

FINC 301s optimal cash transfer amount, using the Baumol model, is GHS 60,000. The firm's fixed cost per cash transfer of marketable securities to cash is GHS 180, and the total cash needed for transactions annually is GHS 960,000. On what opportunity cost of holding cash was this analysis based? (10 marks)

Question 7

FINC 2022 expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order; the purchase price per chip is $25; and the firm's inventory carrying costs is equal to 20 percent of the purchase price. (Assume a 360-day year.) (10 marks)