FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment.
1. If Sandbox gets a cash infusion of P1 million each time it needs cash, how much would be the average cash balance associated with its cash investment? Use a number, no decimal value no currency, no space, no commas *
2. Using the Baumol model, how much would be the Sandbox’s minimum total costs associated with cash infusion? Use a number, no decimal value no currency, no space, no commas.
3. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the holding costs associated with its cash investment? Use a number, no decimal value no currency, no space, no commas *
PLEASE ANSWER ALL QUESTIONS. THANKS
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