Bright paints Ltd. estimates its cash requirement as Rs.2,400,000/- next year. The company faces a fixed cost of Rs.4000/- to obtain new funds. The holding cost is 3% per annum. Determine the optimum cash balance and how many transactions will have to be made during the year
Bright paints Ltd. estimates its cash requirement as Rs.2,400,000/- next year. The company faces a fixed cost of Rs.4000/- to obtain new funds. The holding cost is 3% per annum. Determine the optimum cash balance and how many transactions will have to be made during the year
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 3MC
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Bright paints Ltd. estimates its cash requirement as Rs.2,400,000/- next year. The company faces a fixed cost of Rs.4000/- to obtain new funds. The holding cost is 3% per annum.
Determine the optimum cash balance and how many transactions will have to be made during the year
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