Problem:
HotFoot Shoes would like to maintain its cash account at a minimum level of $40,000 but expects the standard deviation in net daily cash flows to be $3,500, the effective annual rate on marketable securities to be 3.0 percent per year, and the trading cost per sale or purchase of marketable securities to be $350 per transaction.
Required:
Question: What will be its optimal upper cash limit?
Note: Please provide full description.