Lux Co. has a total annual cash requirement of P9,030,000 which are to be paid uniformly. Lux has the opportunity to invest the money at 21% per annum. The company spends, on the average, P30 for every cash conversion to marketable securities. What is the optimal cash conversion size?

Lux Co. has a total annual cash requirement of P9,030,000 which are to be paid uniformly. Lux has the opportunity to invest the money at 21% per annum. The company spends, on the average, P30 for every cash conversion to marketable securities. What is the optimal cash conversion size?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 1P

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