ABC Corporation would like to know what is its optimal cash balance for a disbursement account. The

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ABC Corporation would like to know what is its optimal cash balance for a disbursement account. The daily average disbursement is P40,000. Cost to transfer money into the account average P500 each time. If the money is not in this account, it could have been kept in a mutual fund account that would let ABC earn 3% per year.
Required:
1. Optimum cash balance
2. Total cost of holding and maintaining the optimal cash balance

Posted Date: Sep 16, 2021 02:07 AM

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ABC Corporation would like to know what is its optimal cash balance for a disbursement account. The

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The formula for determining optimum cash balance as per B... View the full answer

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