1. Hollywood Shoes would like to maintain their cash account at a minimum level of $55,000, but expect the standard deviation in net daily cash flows to be $4,500; the effective annual rate on marketable securities to be 6.00 percent per year; and the trading cost per sale or purchase of marketable securities to be $150 per transaction. What will be their optimal cash return point? (Round your answer to 2 decimal places.)
$76,695.98
$59,500.00
$79,254.89
$79,382.73
2. Mission Corp. borrowed $50,000 cash on April 1, 2016, and signed a one-year 12%, interest-bearing note payable. The interest and principal are both due on March 31, 2017.
The amount of interest expense for the year ended December 31, 2016 is:
$4,500.
$6,000.
$4,000.
$1,500.