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Bright Paints Ltd. estimates its cash requirements as Rs. 240, 0000/- next year. The company faces a fixed cost of Rs. 4000/- to obtain new

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Bright Paints Ltd. estimates its cash requirements as Rs. 240, 0000/- next year. The company faces a fixed cost of Rs. 4000/- to obtain new funds. The holding cost is 3% per annum. (a) Determine the optimum cash balance. (b) How many transactions will have to be made during the year? (04 marks)

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