Which of the following is a reason that individuals hold money balances?
1. money does not store value for individuals.
2. there is no opportunity cost for individuals holding money.
3. individuals have precautionary motives for storing money.
4. a decrease in the interest rate will the quantity of money demanded.

Your take on decision making process

The purpose of safety stock is to: a. eliminate the possibility of a stockout. b. control the likelihood of a stockout due to variable demand and/or lead time. c. eliminate the likelihood of a stockout due to erroneous inventory tally. d. protect the firm from a sudden decrease in demand. e. replace failed units with good ones.

Miami incorporated estimates that its retained earnings break point (bpre) is $21 million, and its wacc is 13.40 percent if common equity comes from retained earnings. however, if the company issues new stock to raise new common equity, it estimates that its wacc will rise to 13.88 percent. the company is considering the following investment projects: project size irr a $4 million 14.00% b 5 million 15.10 c 4 million 16.20 d 6 million 14.20 e 1 million 13.42 f 6 million 13.75 what is the firm's optimal capital budget?