Suppose that your weekly cash expenses are $80. Every time you withdraw money from the automated teller

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Suppose that your weekly cash expenses are $80. Every time you withdraw money from the automated teller at your bank, you are charged $.15. Your bank account pays interest of 3% annually.

a. How often should you withdraw funds from the bank?

b. What is the optimal-sized withdrawal?

c. What is your average amount of cash on hand?

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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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Question Posted: Nov 14, 2017 02:33 AM

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Suppose that your weekly cash expenses are $80. Every time you withdraw money from the automated teller

Question:

Step by Step Answer:

Annual cash disbursements 80 x 52 4160 Cost per tran...View the full answer

Fundamentals of Corporate Finance

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