Answer to Question #191259 in Finance for Earl

Question #191259

Makmak Corporation uses the Baumol Cash Management Model to determine its optimal cash balance. For the coming year, the expected cash disbursement total P430,000. The interest rate on marketable securities is P8 per transaction. What is the optimal Cash Balance of the company?


1
Expert's answer
2021-05-10T16:05:17-0400

Optimum Cash Balance =Total cash demand × Transaction Cost


Optimum Cash Balance=P430,000×P8


Optimum Cash Balance=P3,440,000

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS