The Timberline fiRm Expects a Total Need of €12,500 Over

question 72

Multiple Choice

The Timberline firm expects a total need of €12,500 over the next 3 months.They have a beginning cash balance of €1,500, and cash is replenished when it hits zero.The fixed cost of selling
Securities to replenish cash balances is €3.50.The interest rate on marketable securities is 8% per
Annum.There is a constant rate of cash disbursement and no cash receipts during the month.
What is the total saving to the firm if it switches from its current practice to the optimum practice (as
Given by the Baumol model) ?

• A)€10.01
• B)€34.20
• C)€64.96
• D)€122.46
• E)None of the above.

---

Definitions:

Self-Initiated Changes

Modifications or transformations that individuals undertake voluntarily in their personal or professional lives to achieve desired outcomes.

Job Demands

Aspects of employment that demand ongoing physical or psychological exertion, including physical, psychological, social, or administrative elements.

Job Resources

Elements of a job or work environment that help employees to achieve work goals, reduce job demands, and stimulate personal growth, learning, and development.

Core Job Characteristics

Fundamental aspects of a job that affect an employee's motivation and job satisfaction, such as skill variety, task identity, task significance, autonomy, and feedback.