Problem 4-1

Yearly 15 Days
i 12% 0.50%
Y 3200000
a 500
Cash Balance 800000
Opp. Cost 2000

Number of Transaction 4
Initial Investment 2400000
Withdrawals 800000
Profit 2000

Problem 4-2
Yearly Monthly
i 8% 0.67%
Y $ 2,160,000
a $ 200
Cash Balance $ 360,000
Opp. Cost $ 1,200

Number of Transaction 6
Periodic Investment $ 360,000
Final Withdrawal $ 1,800,000
Profit $ 213,600
Problem 4-4
Daily Yearly
i 0.02% 6%
STD of CFs $ 400,000
a $ 100
Lower Limit $ 500,000
Variance $ 160,000,000,000

a) Round Up
Return Point $ 416,016.76 $ 416,017
Optimal Return Point $ 916,016.76 $ 916,017
Upper Limit $ 1,748,050.29 $ 1,748,050
b)
Day Beg. Balance NCF End Balnce
1 $ 1,000,000 $ (300,000) $ 700,000
2 $ 700,000 $ (400,000) $ 300,000
3 $ 916,017 $ 500,000 $ 1,416,017
4 $ 1,416,017 $ (200,000) $ 1,216,017
5 $ 1,216,017 $ 900,000 $ 2,116,017
6 $ 916,017 $ 200,000 $ 1,116,017
7 $ 1,116,017 $ 700,000 $ 1,816,017

Chart Title
Day
$2,500,000 Balance UCL LCL
0 $ 1,000,000 $ 1,748,050 $ 500,000
1 $ 700,000 $ 1,748,050 $ 500,000 $2,116,017
$2,000,000 2 $ 300,000 $ 1,748,050 $ 500,000
2 $ 916,017 $ 1,748,050 $ 500,000
$1,500,000
3 $ 1,416,017 $ 1,748,050 $ 500,000
4 $ $1,416,017$
1,216,017 $ 1,748,050 500,000
5 $ 2,116,017 $ 1,748,050 $ $1,216,017
500,000 $1,116,017
$1,000,000 $1,000,0005 $ 916,017 $ 1,748,050 $ 500,000
$916,017
$916,017 $916,017
$916,017
6 $ $700,000 1,116,017 $ 1,748,050 $ 500,000
7 $ 1,816,017 $ 1,748,050 $ 500,000
$500,000
7 $ 916,017 $ 1,748,050 $ 500,000
$300,000

$-
0 1 2 3 4 5 6

UCL LCL ORP Balance

 Investment/Disinvestment Explanation
$ -
$ 616,017 Disinvestment
$ -
$ -
$ (1,200,000) Investment
$ -
$ (900,000) Investment

le
ORP
$ 916,017
$ $2,116,017 916,017
$ 916,017
$ 916,017 $1,816,017
$1,748,050
$ 916,017
$ 916,017
$1,216,017 $ 916,017
$1,116,017
$ $916,017
$916,017
916,017 $916,017
$916,017
$ 916,017
$ 916,017
$500,000
$ 916,017

4 5 6 7 8

ORP Balance
Problem 4-4
Upper Limit 2 $ 1,600,000
Upper Limit 1 $ 1,300,000
Return Point $ 1,000,000
Lower Limit 1 $ 750,000
Lower Limit 2 $ 500,000

Day Beg. Balance NCF End Balance Evaluated Balance

1 $ 1,000,000 $ (300,000) $ 700,000
2 $ 700,000 $ (400,000) $ 300,000 $ 800,000
3 $ 300,000 $ 500,000 $ 800,000
4 $ 800,000 $ (200,000) $ 600,000
5 $ 600,000 $ 900,000 $ 1,500,000
6 $ 1,500,000 $ 200,000 $ 1,700,000 $ 2,400,000
7 $ 1,000,000 $ 700,000 $ 1,700,000

Day Balance UCL2 UCL1 Chart

ORP Title
$1,800,000 0 $ 1,000,000 $ 1,600,000 $ 1,300,000 $ 1,000,000
$1,700,000
1 $ 700,000
2 $ 300,000 $1,500,000
$1,500,000 3 $ 800,000
4 $ 600,000
$1,200,000
5 $ 1,500,000
6 $ 1,700,000
$1,000,000 $1,000,000
6 $ 1,000,000
$900,000 7 $ 1,700,000 $ 1,600,000 $ 1,300,000
$800,000 $ 1,000,000
$700,000
$600,000
$600,000

$300,000
$300,000
0 1 2 3 4 5 6

Balance UCL2 UCL1 ORP LCL1

 Investment/Disinvestment Explanation
No Action
No Action
No Action
No Action
No Action
$ (700,000.00) Invesment
No Action

e LCL1 LCL2
$ 750,000 $ 500,000
$1,700,000 $1,700,000
$1,600,000
$1,500,000

$1,300,000

$1,000,000 $1,000,000

$ 750,000 $ 500,000
$750,000
00
$500,000

5 6 7 8

ORP LCL1 LCL2