Solve
Guides
You visited us 0 times! Enjoying our articles? Unlock Full Access!
A Minimization of cash balance B Minimise the holding cost D Minimization of total cost
Open in App
Solution
Verified by Toppr
Baumol model of cash management trades off between opportunity cost or carrying cost or holding cost & the transaction cost. As such firm attempts to minimize the sum of the holding cash & the cost of converting marketable securities to cash.
Was this answer helpful?
Similar Questions
Q
1
Baumol's Model of Cash Management attempts to____________.
View Solution
Q
2
The Transaction Motive for holding cash is for _______________.
View Solution
Q
3
Write the following transactions in a Two Column Cash Book and balance the Cash Book:− 2013 (₹) Jan. 1 Cash in hand 6,000 Bank Balance (Cr) 3,000 3 Deposited into Bank 2,000 5 Received from Mohan 400 Discount allowed 10 7 Received a cheque from Hari and sent it to bank 600 9 Received a cheque from Prem Mohan 1,600 Discount allowed 25 12 Withdrew from bank for office use 300 13 Bought goods for cash 600 14 Sold goods for cash 1,200 16 Paid to Ganesh by cheque 494 Discount received 6 18 Prem Mohan's cheque deposited in the bank 20 Sold goods to Gopal for ₹ 1,500 for which he gave cash ₹ 800 and a cheque of ₹ 700. 22 Deposited into bank (including Gopal's cheque) 900 24 Paid rent by cheque 150 25 Withdrew from bank for personal use 200 28 Bank notifies that Prem Mohan's cheque was dishonoured 30 Received from Anil ₹ 270 in cash and ₹ 540 by cheque. Discount Allowed ₹ 90. The cheque was deposited into bank. 31 Bank charges as shown in Pass Book 5 Paid Salary 500
View Solution
Q
4
The transaction motive relates to the desire of the people to hold cash for the future transactions.
View Solution
Q
5
Transactions affecting cash balance only are recorded in the books of accounts.
View Solution
