Bridgette Inc. maintains a cash buffer for unexpected cash outlays for the year amounting to 3,000. Bank of Wildcats charges Bridgette P15 for every transaction with the bank. The bank grants 5% annual interest. Bridgette is contemplation if it will still need to have the cash buffer. 1.How much is the annual savings in annual holding cost of cash for Bridgette if it will not have a cash buffer?

Bridgette Inc. maintains a cash buffer for unexpected cash outlays for the year amounting to 3,000. Bank of Wildcats charges Bridgette P15 for every transaction with the bank. The bank grants 5% annual interest. Bridgette is contemplation if it will still need to have the cash buffer. 1.How much is the annual savings in annual holding cost of cash for Bridgette if it will not have a cash buffer?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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