Question 20ARS-TP1: Given the following information, calculate the target cash b...
Given the following information, calculate the target cash balance using the BAT model:
Annual interest rate 12% |
Fixed order cost $100 |
Total cash needed $240,000 |
What are the opportunity cost of holding cash, the trading cost, and the total
cost? What would these be if $15,000 were held instead? If $25,000 were held?
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