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Rose N More Resources Faces a Smooth Annual Demand for Cash

Question 95

Multiple Choice

Rose N More Resources faces a smooth annual demand for cash of $50 million, incurs transaction costs of $350 every time they sell marketable securities, and can earn 5.2 percent on their marketable securities. What will be their optimal cash replenishment level?


A) $18,708.29
B) $187,082.87
C) $82,041.27
D) $820,412.65

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