Transcribed Image Text: le Problem 3 OPTIMAL CASH BALANCE. Green Corporation anticipates a cash requirement of $1,000 over a 1- month period. It is expected that cash will be paid

Transcribed Image Text: le
Problem 3
OPTIMAL CASH BALANCE. Green Corporation anticipates a cash requirement of $1,000
over a 1- month period. It is expected that cash will be paid uniformly. The annual
interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is $30.
(a) is the optimal cash balance? (b) is the average cash balance? (c) How much
is the total transaction cost? {d) How much is the total holding cost? (e) How much is the
total cost of cash?
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