why quantity is devided by 2
Answers
Answer:
Hello all,
I run into a few problems that ask for the average of something
something. Then the answer says must divide the result by 2 to get the
answer. Why do we divide it by 2???
For example:
A company uses the following formula in determining its optimal level of
cash:
C* = Square root of ((2bT)/i) where
b = fixed cost of the transaction = $10/transaction
i = interest rate on marketable securities = 6% (annual)
T = Total demand for cash over a period of time = $12,000/month
Answer = $6,928/2 = $3,464. Why do we divide this buy 2???? Why not
other numbers? Thanks for your help!
__________________
TX resident, CA Board
2008 Becker Self Study
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