4. Sovereign-Tea Company projected to make even monthly cash payments of P150,000 during the year. The average return on money market placements is eight percent per annum and payment for cash transfer is expected to be P250 per transaction. Determine the total relevant cost using the Baumol Model.

4. Sovereign-Tea Company projected to make even monthly cash payments of P150,000 during the year. The average return on money market placements is eight percent per annum and payment for cash transfer is expected to be P250 per transaction. Determine the total relevant cost using the Baumol Model.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

4. Sovereign-Tea Company
projected to make even
monthly cash payments of
P150,000 during the year. The
average return on money
market placements is eight
percent per annum and
payment for cash transfer is
expected to be P250 per
transaction. Determine the
total relevant cost using the
Baumol Model.

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