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Penny Pinchers Inc

question 92

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Penny Pinchers Inc.is attempting to implement a Baumol model for cash management.Given that Treasury bills offer a 7.5 percent return, that each sale of bills involves a fixed cost of $30, and that Pinchers disburses $6.5 million annually, determine the optimum amount of bills to sell each time.What will be the average cash balance under these assumptions?


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The personal strength that helps most people cope with stress and recover from adversity and even trauma.

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Individuals who are capable of managing everyday stressors and leading a productive and fulfilling life.

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A state of hardship, difficulty, or misfortune that one must manage or overcome.

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Requiring much time, attention, effort, or patience; often refers to people or tasks that are challenging and insist on high standards.

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