According to William J. Baumol's economic order quantity model with respect to cash management, optimum cash level is that level of cash where :

CS Executive · Financial and Strategic Management · PYQS · June 2021
According to William J. Baumol's economic order quantity model with respect to cash management, optimum cash level is that level of cash where :
(A) Carrying costs are maximum and transactions costs are minimum
(B) Carrying costs and transactions costs are minimum
(C) Carrying costs and transactions costs are maximum
(D) Carrying costs are minimum and transactions costs are maximum

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Working Capital Management

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