Assume that short-term investment securities have a 5 percent yield, and it costs the firm a $20 each time it buys or sells investment securities. The best estimate of cash disbursements has been found to be $20,000. Management wants to keep at least $1,000 in the cash account for emergencies.

1. Given these conditions, find the firm's target cash balance, according to the Baumol model
2. What is the average cash balance?
3. How many security sales will management execute?
4. Find the total cost of the cash position.