The annual cash requirement of A Ltd. is ₹25 lakh. Cost of conversion of marketable securities per lot is ₹2,500. The company can earn 5% annual yield on its securities. What will be the economic lot size according to th
CS Executive · Financial and Strategic Management · PYQS · December 2020
The annual cash requirement of A Ltd. is ₹25 lakh. Cost of conversion of marketable securities per lot is ₹2,500. The company can earn 5% annual yield on its securities. What will be the economic lot size according to the Baumol Model ?
Answer & Explanation:
Correct Answer: Option (C)
Official answer key: (C).
Topics: Financial Management
Related Questions in this Topic
- Assume that a firm has accurately calculated the net cash flows relating to an investment proposal. If the net present v...
- A firm has EBIT of ₹ 50,000. Market value of 10% debt is ₹ 80,000 and overall capitalization rate is 20%. Market value o...
- A firm has inventory turnover of 4 and cost of goods sold is ₹ 7,50,000. With better inventory management, the inventory...
- 80% of sales of ₹ 12,00,000 of a firm are on credit. It has a Receivable Turnover of 8. What is the Average collection p...
- A Company's Raw material storage period is 20 days; Finished goods storage period is 25 days; Receivables (Debtors) coll...