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## Category: Corporate Finance # Order answer: Interpreting Miller Orr Econoline Crush Inc uses a Miller Orr

Posted By George smith

Interpreting Miller-Orr Econoline Crush, Inc., uses a Miller-Orr cash management approach with a lower limit of \$50,000, an upper limit of \$130,000 and a target balance of \$75,000. Explain what each of these points represents; then explain how the system will work. # Order answer: Using Miller Orr Slap Shot Corporation has a fixed cost associat

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Using Miller-Orr Slap Shot Corporation has a fixed cost associated with buying and selling marketable securities of \$75. The interest rate is currently .021 percent per day, and the firm has estimated that the standard deviation of its daily net cash flows is \$60. Management # Order answer: Interpreting Miller Orr based on the Miller Orr model describe w

Posted By George smith

Interpreting Miller-Orr based on the Miller-Orr model describe what will happen to the lower limit, the upper limit, and the spread (the distance between the two) if the variation in net cash flow grows. Given an intuitive explanation for why his happens. What happens if # Order answer: Terms of Sale a film offers terms of 2 10 net

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Terms of Sale a film offers terms of 2/10, net 35. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculation, explain what will happen to this effective rate if: a. The discount is # Order answer: ACP and Receivables Turnover Music City Inc has an average

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ACP and Receivables Turnover Music City, Inc, has an average collection period of 42 days. Its average daily investment in receivables is \$43,000. What are annual credit sales? What is the receivables turnover? # Order answer: a If the one year discount factor is 88 what is

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a. If the one-year discount factor is .88, what is the one-year interest rate? b. If the two-year interest rate is 10.5 percent, what is the two-year discount factor? c. Given these one- and two-year discount factors, calculate the two-year annuity factor. d. If the PV # Order answer: A factory costs 800 000 You reckon that it will produce

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A factory costs \$800,000. You reckon that it will produce an inflow after operating costs of \$170,000 a year for 10 years. If the opportunity cost of capital is 14 percent, what is the net present value of the factory? What will the factory be # Order answer: Harold Filbert is 30 years of age and his salary

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Harold Filbert is 30 years of age and his salary next year will be \$20,000. Harold forecasts that his salary will increase at a steady rate of 5 percent per annum until his retirement at age 60. a. If the discount rate is 8 percent, # Order answer: A factory costs 400 000 You reckon that it will produce

Posted By George smith

A factory costs \$400,000. You reckon that it will produce an inflow after operating costs of \$100,000 in year 1, \$200,000 in year 2, and \$300,000 in year 3. The opportunity cost of capital is 12 percent. Draw up a worksheet like that shown in # Order answer: Sometimes real rates of return are calculated by subtracting the

Posted By George smith

Sometimes real rates of return are calculated by subtracting the rate of inflation from the nominal rate. This rule of thumb is a good approximation if the inflation rate is low. How big is the error from using this rule of thumb to calculate real