Question
Managerial Accounting Hi CH Tutor! Please help me to answer these questions on a sheet of paper. We need the one-by-one solution for these. If
Managerial Accounting
Hi CH Tutor! Please help me to answer these questions on a sheet of paper. We need the one-by-one solution for these. If you follow the instructions, I will give you positive feedback. Thank you.
The annual cash requirement of Magmar Company is 1,000,000.00. The company has marketable securities in lot sizes of 50,000.00; 100,000.00; 200,000.00; 250,000.00; and 500,000.00. Cost of conversion of marketable securities per lot is 1,000.00. The company can earn 5.00% annual yield on its securities. Determine the following via Baumol Model:
1. optimum cash balance
2. cost of cash that can be obtained by Baumol Model
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