umphrey's Housing has been practicing cash management for some time by using the Baumol model for determining cash balances. Some time ago, the model called for an average balance (C*/2) of $500; at that time, the rate on marketable securities was 4 percent. A rapid increase in interest rates has driven the interest rate up to 9 percent. What is the appropriate average cash balance no

Find the present values of the following cash flow streams. The appropriate interest rate is 9%. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF0 = 0. Note also that it is quite easy to work the problem with Excel, using procedures described in the Ch04 Tool Kit.xlsx.) Do not round intermediate calculations. Round your answers to the nearest cent. Year Cash Stream A Cash Stream B 1 $100 $200 2  400  400 3  400  400 4  400  400 5  200  100 Stream A: $   Stream B: $   What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest dollar. Stream A $   Stream B $

Find the present values of the following cash flow streams. The appropriate interest rate is 6%. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF0 = 0. Note also that it is quite easy to work the problem with Excel, using procedures described in the Ch04 Tool Kit.xlsx.) Do not round intermediate calculations. Round your answers to the nearest cent. Year Cash Stream A Cash Stream B 1 $100 $250 2  400  400 3  400  400 4  400  400 5  250  100 Stream A: $   Stream B: $   What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest dollar. Stream A $   Stream B $

You have the following cash flows: Year 0 Net Cash Flow, $ -6,000 1 -5,000 2 +12,000 3 -2,000 +6,000 For these cash flows, it has already been determined there may be more than one positive root . Calculate the EROR using the MIRR method with i 16% and is-8%. HINT: Draw the Cash Flow diagram. You must show the mathematical setup and detailed calculations you used to calculate your EROR to two decimal points by hand. An Excel solution is not sufficient.