MD Groceries currently sets its initial cash balance at $5,000, which is depleted every four days. The current market rate of return is 4.5% per year. The firm pays $2.50 each time it replenishes its
Cash account. Use a 360-day year.
What are the trading costs for MD's decision regarding its cash balance?
A) $65.00 per year
B) $100.00 per year
C) $112.50 per year
D) $225.00 per year
E) $450.00 per year
Correct Answer:
Verified
Q102: You are considering implementing a lockbox system
Q103: Burke Corporation is investigating a lockbox system
Q104: On an average day, your firm receives
Q105: Your firm spends $35,000 a week to
Q106: West Ridge Wholesalers receives an average of
Q108: Your firm spends $150,000 a week to
Q109: Your firm spends $110,000 a week to
Q110: The Stetson Co. receives an average of
Q111: The BDF Co. receives five cheques per
Q112: Your firm generally receives 3 cheques a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents