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Reese's Resources Faces a Smooth Annual Demand for Cash of $15

Question 99

Multiple Choice

Reese's Resources faces a smooth annual demand for cash of $15 million, incurs transaction costs of $125 every time they sell marketable securities, and can earn 4.5 percent on their marketable securities. What will be their optimal cash replenishment level?


A) $28,867.51
B) $288,675.13
C) $61,237.24
D) $6,123.72

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