Mama Inc. maintains a cash buffer for unexpected cash outlays for the year amounting to 3,000. Bank of Tigers charges Mama P15 for every transaction with the bank. The bank grants 5% annual interest. Mama is contemplation if it will still need to have the cash buffer. How much is the annual savings in annual holding cost of cash for Mamaif it will not have a cash buffer?
Mama Inc. maintains a cash buffer for unexpected cash outlays for the year amounting to 3,000. Bank of Tigers charges Mama P15 for every transaction with the bank. The bank grants 5% annual interest. Mama is contemplation if it will still need to have the cash buffer. How much is the annual savings in annual holding cost of cash for Mamaif it will not have a cash buffer?
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 19P
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Mama Inc. maintains a cash buffer for unexpected cash outlays for the year amounting to 3,000. Bank of Tigers charges Mama P15 for every transaction with the bank. The bank grants 5% annual interest. Mama is contemplation if it will still need to have the cash buffer. How much is the annual savings in annual holding cost of cash for Mamaif it will not have a cash buffer?
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