Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be used to purchase government bonds earning 5%, then how much money should Jan's hold?
A. $6,000
B. $10,000
C. $8,000
D. $4,000
Answer: C
You might also like to view...
The socially optimal provision of a public good can be obtained by
a. Privatizing the good b. Vertically adding the demand curves for the good c. Horizontally adding the demand curves for the good d. Eliminating access to the good e. Allowing open access to the good
A manager of a firm with market power faces the marginal revenue product and average revenue product curves shown below. The firm incurs weekly fixed costs of $1,800. The firm employs a single variable input, labor, which costs $600 per worker each week. ss
Given the above, in profit-maximizing (or loss-minimizing) equilibrium, the firm's total variable costs are
A. $400. B. $12,000. C. $6,000. D. $600. E. none of the above
The supply of Russian caviar from the Caspian Sea diminished after the collapse of Soviet communism. The price of caviar rose from $395 a pound to $595 a pound. Still, revenue from the sale of caviar rose 30 percent. You can conclude that:
A. the supply curve for caviar has shifted to the left along an elastic demand curve. B. an elastic supply curve for caviar has shifted to the left. C. an inelastic supply curve for caviar has shifted to the left. D. the supply curve for caviar has shifted to the left along an inelastic demand curve.
?Kites /hourSnowboards /hourJesse81April123
Based on the data in Table 18.1:
A. Jesse should specialize in painting kites and trade for snowboards. B. Jesse should specialize in painting snowboards and trade for kites. C. April should specialize in both goods. D. Jesse should specialize in both goods.