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Business, 21.12.2019 05:31 golffuture666

Rossignol co. manufactures and sells skis and snowboards in france, switzerland and italy, and also maintains a corporate account in frankfurt, germany. rossignol has been setting separate operating cash balances in each country at a level equal to expected cash needs plus two standard deviations above those needs, based on a statistical analysis of cash flow volatility. expected operating cash needs and one standard deviation of those needs are below. rossignol’s frankfurt bank suggests that the same level of safety could be maintained if all precautionary balances were combined in a central account at the frankfurt headquarters. a. how much lower would rossignol’s total cash balances be if all precautionary balances were combined? assume cash needs in each country are normally distributed and are independent of each other.

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