The Duckett Group is trying to determine its optimal average cabs balance. The firm determined that it will need R5 107 930 net new cash during the coming year. The fixed transactions cost of converting securities to cash is R52, and the firm earns 7% on its Marla table securities investments.

Required :

a) According to the Baumol model, what is the optimal transaction size for transfers from marketable securities to cash?

b) According to Baumol model, what should be Duckett's average cash balance?

C) What will be the total cost to Duckett of maintaining the optimal average cash balance, as determined by Baumol model?

Note: Do not round off your calculations only round off your final answer to 2 decimal places