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ABX Company uses the Baumol cash management model. Cash disbursement are constant at RM20,000 per month. Short-term investment yield 5% a year, while cash held
ABX Company uses the Baumol cash management model. Cash disbursement are constant at RM20,000 per month. Short-term investment yield 5% a year, while cash held in the company's bank account earns zero interest. Switching costs (that is, for each purchase or sale of short-term investment) are RM30 for each transaction. Calculate the optimal amount (to the nearest RM100) to be transferred in each transaction
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