Question: please solve it step by step ( no excel ) Al Bilad Bank is operating business in Kuwait with a high degree of stability and

please solve it step by step ( no excel )

please solve it step by step ( no excel ) Al Bilad

Al Bilad Bank is operating business in Kuwait with a high degree of stability and in Tunisia which is characterized by high degree of fluctuations in cash flow demand on daily basis. It is estimated that the demand for cash on monthly basis is around $11,500,000 under the opportunity cost of 9% and transaction cost of 25 in Kuwait The daily cash variation demand of the bank operations in Tunisia is estimated to be $1,800,000 and annual interest rate of 20%. The transaction cost in Tunisia is around $460 under a minimum limit on daily basis of $25,000. Required: 1. Find out the minimum cash balance and the resultant frequency of cash withdrawals from the available cash resources as spelled out by the Baumol Model under stability syndrome of the Kuwait economy. 2. What would be the optimal cash balance in Kuwait if interest rate is decreased by 22 percent. Other things remain the same. Compare between one and two in brief. 3. Figure out the minimum cash balance, average cash balance, and the upper limit for ban operations in Tunisia as spelled out by the Miller-Orr Model

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