Already have an account? Get multiple benefits of using own account!
Login in your account..!
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Calculate the optimum amount of funds to transfer?
The Baumol model is derived from the EOQ model and is able to be applied in situations where there is a constant demand for cash or cash disbursements. Regular transfers are made as of interest-bearing short-term investments or cash deposits into a current account. The Baumol model believes the annual demand for cash (D) the cost of each cash transfer (C) and the interest difference between the rate paid on short-term investments (r1) and the rate paid on a current account (r2) in order to calculate the optimum amount of funds to transfer (F). The model is like follows.
F = ((2 × D × C)/(r1 - r2))0.5
By optimising the amount of money to transfer the Baumol model minimises the opportunity cost of holding cash in the current account thereby reducing the costs of cash management. Nevertheless the Baumol model is unlikely to be of assistance to Thorne Co because of the assumptions underlying its formulation. Steady annual demand for cash is assumed whereas its cash budget suggests that Thorne Co has a varying need for cash. The model presumes that each interest rate and the cost of each cash transfer are constant and known with certainty. In reality interest rates as well as transactions costs aren't constant and interest rates, in particular can change frequently. A cash management model which is able to accommodate a variable demand for cash such as the Miller-Orr model may be more suited to the needs of the company.
Q. Illustrate the Scope of Financial Management? Financial management as an educational discipline has undergone notable changes over the years with regard to its scope of func
Working and function of stock exchange
SEC Filings -Informational and financial DISCLOSURES required by SEC in order to comply with many sections of the Securities Act of 1933 and Securities and Exchange Act of1934. A n
What is Settlement date? Please provide me report on Settlement date. It is about 2000 words count report on topic Settlement date.
Corporates generally raise funds from the Inter Corporate Deposit (ICD) markets. These instruments generally carry interest rates higher than the other short-term
Examine about Environmental (external) analysis "A study that considers potential environmental effects during planning phase before an investment is made or an operation start
High-yield bonds are issued by organizations that do not qualify for "investment-grade" ratings by any one of the leading credit rating agencies
can you help me subtract checks and balances in financial algebra
Q. Explain about Cash Flow Statement? Cash Flow Statement: - This is another process of cash management. A cash flow statement is the statement showing inflows as well as outfl
. Why do some organizations seem to have a new CEO every year or two, whereas others have top leaders who stay with the company for many years (e.g., John Chambers at Cisco)? What
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd