Answered: ortunity to invest the money at 24% per…

ortunity to invest the money at 24% per annum. The company spends, on the average, P40 for every cash conversion to marketable securities. What is the optimal cash conversion size? A.P60,000

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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Question

ABC Inc. has a total annual cash requirement of P9,075,000 which are to be paid uniformly. ABC has the opportunity to invest the money at 24% per annum. The company spends, on the average, P40 for every cash conversion to marketable securities. What is the optimal cash conversion size?

A.P60,000
B.P45,000
C.P55,000
D.P72,500

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