Green Company uses the Baumol model to manage its disbursement account. Monthly cash disbursement is P1,200,000. Cash in this account could have earned 5% on money marketable securities. Green incurs P576 every time cash is transferred to this account. The optimum cash balance is A. 576,000.00 B. 166,276.88 C. 124,707.66 D. 432,000.00

Green Company uses the Baumol model to manage its disbursement account. Monthly cash disbursement is P1,200,000. Cash in this account could have earned 5% on money marketable securities. Green incurs P576 every time cash is transferred to this account. The optimum cash balance is A. 576,000.00 B. 166,276.88 C. 124,707.66 D. 432,000.00

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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