OPTIMAL CASH BALANCE. Green Corporation anticipates a cash requirement oF$1,000 over a 1- month period. It is expected that cash will be paid uniformly. The annual interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is $30. (a) What is the optimal cash balance? (b) What is the average cash balance? (c) How much is the total transaction cost? (d) How much is the total holding cost? (e) How much is the
OPTIMAL CASH BALANCE. Green Corporation anticipates a cash requirement oF$1,000 over a 1- month period. It is expected that cash will be paid uniformly. The annual interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is $30. (a) What is the optimal cash balance? (b) What is the average cash balance? (c) How much is the total transaction cost? (d) How much is the total holding cost? (e) How much is the
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter23: Other Topics In Working Capital Management
Section: Chapter Questions
Problem 2P: Optimal Cash Transfer Barenbaum Industries projects that cash outlays of 4.5 million will occur...
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