Your fiRm Needs $68,000 a Week to Pay Bills

question 274

Multiple Choice

Your firm needs $68,000 a week to pay bills. The standard deviation of the weekly disbursements is $9,500. The firm has established a lower cash balance limit of $40,000. The applicable interest
Rate is 6 percent and the fixed cost of transferring funds is $20. What is the optimal initial cash
Balance?

• A) $34,332
• B) $36,009
• C) $43,908
• D) $47,117
• E) $48,552

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Definitions:

Entrepreneurial Mindset

A way of thinking that enables individuals to overcome challenges, be decisive, and accept responsibility for outcomes.

Detrimental Effect

An adverse impact or negative consequence resulting from a particular action or event.

Creativity

The ability to transcend traditional ideas, rules, patterns, relationships, or the like, and to create meaningful new ideas, forms, methods, interpretations, etc.

Born With

Refers to innate qualities, traits, or characteristics that an individual possesses from birth.