Green Corporation anticipates a cash requirement of P1,500 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 P30. (a) What is the optimal cash balance? (b) What is the average cash balance? CHOOSE THE CORRECT ANSWER FOR A AND B (A) P1,432.05 and (B) P566.03 (A) P2,121.32 and (B) P8060.66 (A) P1,121.32 and (B) P1060.66 (A) P2,121.32 and (B) P1060.66 (A) P1,732.05 and (B) P866.03

Green Corporation anticipates a cash requirement of P1,500 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 P30. (a) What is the optimal cash balance? (b) What is the average cash balance? CHOOSE THE CORRECT ANSWER FOR A AND B (A) P1,432.05 and (B) P566.03 (A) P2,121.32 and (B) P8060.66 (A) P1,121.32 and (B) P1060.66 (A) P2,121.32 and (B) P1060.66 (A) P1,732.05 and (B) P866.03

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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