A firm maintains a separate account for cash disbursement. The administrative and transaction cost of transferring cash to the disbursement account…
CA Intermediate · Financial Management and Strategic Management · PYQS · January 2026
A firm maintains a separate account for cash disbursement. The administrative and transaction cost of transferring cash to the disbursement account is 25 per transfer. Marketable securities yield 10% per annum. The firm has determined its optimum cash balance at 30,000, according to the William J. Baumol Model. What will be the Total Annual Cash Disbursements of the firm?
Suggested Answer and Working Notes:
Correct Answer: Option (A)
₹ 18,00,000
Topics: Part-A: Financial Management
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