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ABC CorpDisburses $4 Million Annually and Keeps Idle Funds in Treasury

Question 21

Multiple Choice

ABC Corp.disburses $4 million annually and keeps idle funds in Treasury bills which earn an average of 5 percent and incur a fixed cost of $35 each time a cash conversion is made.What is the average amount of cash that ABC Corp.should have on hand?


A) $16,733
B) $33,466
C) $37,417
D) $74,833

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