(Solved): b) Desired ending balance can be determined using qualitative and quantitative methods. i) Explain ...

b) Desired ending balance can be determined using qualitative and quantitative methods. i) Explain the FOUR (4) motives for holding cash. ii) Red Sea Salt Co. makes cash payments of \( \$ 15,000 \) per week. The interest rate on marketable securities is \( 11 \% \) and every time the company sells marketable securities to be converted into cash every time the company makes transfer. Compute the optimal amount of cash balance and the total number of transfers from marketable securities to cash per year, based on Baumol's cash management model.