Exhibit Duckett Group
The Duckett Group is trying to determine its optimal average cash balance. The firm has determined that it will need $5,000,000 net new cash during the coming year. The fixed transaction cost of converting securities to cash is $50, and the firm earns 10 percent on its marketable securities investments.
Refer to Exhibit Duckett Group. According to the Baumol model, what should be Duckett's average cash balance?
A. $35,356
B. $3,536
C. $22,157
D. $70,711
E. $42,918
Answer: A
You might also like to view...
Identification occurs when we form an attitude to conform to another person's or group's expectations
Indicate whether the statement is true or false
Describe psychologist Bruce Tuckman’s five stages of group development by explaining each.
What will be an ideal response?
Personal selling involves interpersonal interactions between salespeople and individual customers
Indicate whether the statement is true or false
Allison just accepted an expatriate assignment with Acme Global in Estonia. To cover her expenses, Acme Global paid her a set amount of money to use on items such as taxes, vehicles, housing, and similar items. It appears Acme Global took the ______ approach to Allison’s compensation.
A. lump-sum B. negotiation C. pure localization D. international-minus