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What is the optimal cash balance of the company

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Problem 1: Makmak Corporation uses the Baumol Cash Management Model to determine its optimal cash balance. For the coming year, the expected cash disbursement total P432,000. The interest rate on marketable securities is 5% and there is P8 cost per transaction. What is the optimal Cash Balance of the company?

Option 1: P1,175.76
Option 2: P5,878.78
Option 3: P11,757.55
Option 4: P142,000

Reference no: EM132899836

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