Gear Inc., has a total annual cash requirement of P14,700,000 which are to be paid uniformly. Gear
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Question:
Gear Inc., has a total annual cash requirement of P14,700,000 which are to be paid uniformly. Gear has the opportunity to invest the money at 24% per annum. The company spends, on the average, P40 for every cash conversion to marketable securities.
What is the optimal cash conversion size?
P70,000
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