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Using the Baumol-Tobin Transactions Model, answer the following. Assume the following. The interest rate is 10%. The ATM fee (transaction cost) for withdrawing money is $2. My monthly income is $1,000. I make equal-sized cash withdrawals for each trip I go to the bank. Given this information, explain the following:
a. What is the optimal number of trips I will make to the ATM each month (N*)?
b. Given that N*, what is my optimal average monthly money demand (money in my wallet, not the bank)?
c. If I decide to go more often to the bank, why would this be less optimal? Explain
d. If I decide to go the bank less often, why would this be less optimal? Explain
q.part 1in 2011 company xyz had sales of 345620million net working profit subsequent to taxes of 10250 million and
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