Lemon’s evaluation of its cash outlay required indicates that it needs 200,000 for the year. Regardless, of the amount. It incurs 50 to convert Marketable Securities to Cash. The Marketable Securities earn an annual rate of 5%. Lemon does not maintain buffer cash. A. How much is the Optimal Transaction Size? B. How much is the Average Cash Balance? C. How much is the Annual Holding Cost as a result of keeping Cash in Bank?
Lemon’s evaluation of its cash outlay required indicates that it needs 200,000 for the year. Regardless, of the amount. It incurs 50 to convert Marketable Securities to Cash. The Marketable Securities earn an annual rate of 5%. Lemon does not maintain buffer cash. A. How much is the Optimal Transaction Size? B. How much is the Average Cash Balance? C. How much is the Annual Holding Cost as a result of keeping Cash in Bank?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lemon’s evaluation of its cash outlay required indicates that it needs 200,000 for the year. Regardless, of the amount. It incurs 50 to convert Marketable Securities to Cash. The Marketable Securities earn an annual rate of 5%. Lemon does not maintain buffer cash.
A. How much is the Optimal Transaction Size?
B. How much is the Average Cash Balance?
C. How much is the Annual Holding Cost as a result of keeping Cash in Bank?
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