Question: Answer the given problem Hain your answer Optimal cash balance. The Madatung Corporation plans to have PI million in steady cash outlays for next year.

Answer the given problem

Hain your answer Optimal cash balance. The Madatung Corporation plans to have PI million in steady cash outlays for next year. The firm believes that it will face an opportunity interest rate of 15% and will incur a cost of P200 each time it borrows ( or withdraws). Required: Using the Baumol model; 1. Determine the transactions demand for cash (the optimal borrowing or withdrawal lot size) for Madatung Company. 2. What will be the cash cycle for the firm (in days)? 3. What would be the average cash balance for the firm? 4. Compute the total relevant cost of cash balance

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Hi guys, I am trying to properly answer an accounting question concerning shares, bonds, and stock. I was given two annual reports, and am asked to make a decision on one of the companies depending...

Hi there! One more question for you. Similar to my last one. I have to have it done by tonight. Let me know if you cannot do it. Here it is: Scenario 3 May I Propose To... You are a partner in a...

You are a partner in a prestigious accounting firm, and you just received requests for proposal from two companies; Advanced Micro Devices, and Facebook. The deadline for the proposals is, as is...

I need the solution forexsercise 33 - 38 on chapter 9of corporate financeas the attached file. pls do and send to my e..8@gmail.com Chapter 9 Stock Valuation 299 9. Corporate Ethics Is it unfair or...

Garden State Container Corporation Financial Analysis and Forecasting Directed Garden State Container Corporation manufactures boxes and other containers primarily for farm products. More than 85...

Per your note, reference below: Attached is Progress Test 3 Template (ACCT 652 - @ Pepperdine University). - I need Progress 3 Test ANSWERED and Turned around to me 2 HOURS from this post. Attached...

(Click on the icon here e in order to copy the contents of the data table below into a spreadsheet.) Year t) ho 1 2 3 4 5 Free cash flow (FCF) $220,000 $290,000 $340,000 $420,000 $480,000 Print Done...

Problem 6-7 As the chief financial officer of Adirondack Designs, you have the following information: Next year's expected net income after tax but before net.I 'Financing $ 43 million Sinking-fund...

Write a program that will convert degrees fahrenheit to degrees celsius.

The late 1980s and early 1990s were a significant time for Eastern Europe. Several national boundaries and political ideologies, as well as the names of a few countries, changed during this period....

The active employee group is 1 0 yearl. Bequileed: t . Fil in the mining amounts. 2 . Prepase the 2 0 2 4 journal endy to aecond permion enpence Cemplete this evestion if anterting yeer anewers in me...

7. A company is deciding on an order quantity, Q, using the economic order quantity (EOQ) formula to compute the optimal order size, Q* Suppose they ask the question: If demand increases by a factor...

6. Think of a situation where you noticed that the other person or people did not like or understand your behaviour. Examine your own intentions behind the behaviour.

2. In this chapter, the reader should reflect on the following concepts: historical reason, goal orientation, core values and top performance.

1. To understand how to set goals in a communication process