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Homework answers / question archive / Pure Gold Corporation expects to make monthly cash payments of P 8,640,000

Pure Gold Corporation expects to make monthly cash payments of P 8,640,000

Accounting

Pure Gold Corporation expects to make monthly cash payments of P 8,640,000.00, evenly during the year. The average return on money market placement is 6.21 % per annum and it expects P 23.00 transaction costs per cash transfer.

 

Using the Baumol Cash management Model, what is the average cash balance?

Compute the total Transaction cost using the optimal cash balance?

Using the Baumol Cash Management model, what is the company’s optimal cash balance?

Pure Gold Corporation expects to make monthly cash payments of P 8,640,000.00, evenly during the year. The average return on money market placement is 6.21 % per annum and it expects P 23.00 transaction costs per cash transfer.

 

Using the Baumol Cash management Model, what is the average cash balance?

Compute the total Transaction cost using the optimal cash balance?

Using the Baumol Cash Management model, what is the company’s optimal cash balance?

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