Question
Computer Supplies Inc. uses Boumol Model to manage its cash holdings. The following Information is available from its records for the current year Annual demand
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Computer Supplies Inc. uses Boumol Model to manage its cash holdings. The following Information is available from its records for the current year
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Annual demand for cash is Sh. 26,000/
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Cost of transferring cash to current accounts is sh.30/ per transfer.
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Carrying cost per unit per annum is Sh.1.56
Required
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Calculate the optimum amount of cash to be transferred to current
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Based on ( i) above, how many transfers should Computer Supplies Inc. make each year
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Calculate total Average Cash balance
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Calculate the total cost of transferring and holding cash
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Financial Markets And Institutions
Authors: Frederic S. Mishkin
2nd Edition
0321014650, 9780321014658
