Problem 2. Lexberville Company expects to make even monthly cash payments of P166,666.67 during the year. The average return on money market placements is 8% p.a. and payment for cash transfer is expected to be P242 per transaction. Requirements: 5. Transaction cost at the optimum cash balance. (round to nearest whole number) 6. Transaction cost at P40,000 cash balance. 7. Opportunity cost at P500,000 cash balance.

Problem 2. Lexberville Company expects to make even monthly cash payments of P166,666.67 during the year. The average return on money market placements is 8% p.a. and payment for cash transfer is expected to be P242 per transaction. Requirements: 5. Transaction cost at the optimum cash balance. (round to nearest whole number) 6. Transaction cost at P40,000 cash balance. 7. Opportunity cost at P500,000 cash balance.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

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