Optimal Cash Level Calculator (Baumol's Model)
This calculator uses Baumol's model of cash management to compute a company's optimal level of cash, given the fixed cash transaction cost, the total cash required for the period, and the periodic interest rate.
- Baumol's model is commonly used to compute the optimal level of cash that a company should withdraw or borrow at a time. Its objective is to simultaneously minimize cash transaction costs and the opportunity cost of holding cash.
Please enter the necessary parameter values, and then click 'Calculate'.