Halliday inc receives a 2 million payment once a year of


Halliday Inc. receives a $2 million payment once a year. Of this amount, $700,000 is needed for cash payments made during the next year. Each time Halliday deposits money in its account, a charge of $2.00 is assessed to cover clerical costs. If Halliday can hold marketable securities that yield 4%, and then convert these securities to cash at a cost of only the $2 deposit charge, what is the total cost for one year of holding the minimum cost cash balance according to the Baumol model?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Halliday inc receives a 2 million payment once a year of
Reference No:- TGS01242207

Expected delivery within 24 Hours