Data on Nathan Enterprises has determined that it needs Php 7.8 million in cash per week. Data on Nathan Enterprises needs additional cash, it can sell marketable securities, incurring a fee of Php 500 for each transaction. If Data on Nathan Enterprises leaves funds in its marketable securities, it expects to earn approximately 0.6% per week on their investment. Using the economic order quantity model, how much cash should Data on Nathan Enterprises raise from selling securities each week to minimize its costs of cash?

Data on Nathan Enterprises has determined that it needs Php 7.8 million in cash per week. Data on Nathan Enterprises needs additional cash, it can sell marketable securities, incurring a fee of Php 500 for each transaction. If Data on Nathan Enterprises leaves funds in its marketable securities, it expects to earn approximately 0.6% per week on their investment. Using the economic order quantity model, how much cash should Data on Nathan Enterprises raise from selling securities each week to minimize its costs of cash?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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