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How much is the total transaction cost

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Question - Optimal Cash Balance - Green Corporation anticipates a cash requirement of $1,000 over a 1- month period. It is expected that cash will be paid uniformly. The annual interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is $30.

Required -

(a) What is the optimal cash balance?

(b) What is the average cash balance?

(c) How much is the total transaction cost?

(d) How much is the total holding cost?

(e) How much is the total cost of cash?

Reference no: EM133095908

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