An electronic transfer of funds saves 3 days’ time of float. The daily interest rate is 0.025%. The cost of electronic transfer is Rs 8. Find how large the amount of transfer should be to justify the...

An electronic transfer of funds saves 3 days’ time of float. The daily interest rate is 0.025%. The cost of electronic transfer is Rs 8. Find how large the amount of transfer should be to justify the additional cost of electronic transfer.

Find out the optimal cash balance if a firm pays out Rs 1,00,000 per month. The investment in marketable securities gives 8% p.a. but the transaction cost is Rs 20 per transaction.