Hotfoot shoes would like to maintain its cash account at a


HotFoot Shoes would like to maintain its cash account at a minimum level of $43,000, but expects the standard deviation in net daily cash flows to be $5,800, the effective annual rate on marketable securities to be 5.7 percent per year, and the trading cost per sale or purchase of marketable securities to be $120 per transaction.

What will be its optimal cash return point?

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Financial Management: Hotfoot shoes would like to maintain its cash account at a
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