Question

A firm maintains a separate account for cash disbursement

Total disbursement are Rs.12,50,000 per year. Administrative and

transaction costs of transferring cash to disbursement account is Rs.20 per transfer. Marketable securities yield Is 8% per annum Determine the optimum cash balance according to win

Baumol models​

Answer 1

Step-by-step explanation:

answer is 2588854755 k na

Answer 2

Answer:

The optimum cash balance according to Baumol's models will be

Rs. 25,000​

Step-by-step explanation:

• The formula for Baumol models​

                     $C = \sqrt{\frac{2 X A X F }{O} }$

        Where C = optimum cash balance = Find

                    A = Total disbursement = Rs. 12,50,000

                    F = Fixed Cost per transfer = Rs 20

                    0 =  Yeild of Marketable Securities = 8%

Now putting all the values we get,

C = Rs. 25,000

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