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Williams Company's Optimal Cash Transfer Amount, Using the Baumol Model

question 18

Multiple Choice

Williams Company's optimal cash transfer amount, using the Baumol model, is $60,000. The firm's fixed cost per cash transfer of marketable securities to cash is $180, and the total cash needed for transactions annually is $960,000. In addition, the total estimated cash costs (transfers and carrying cost) for the firm, based on 16 transactions per year, are $5,760. On what opportunity cost of holding cash was this analysis based?

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Definitions:

Trigeminal Nerve

Refers to the fifth cranial nerve, responsible for sensation in the face and motor functions such as biting and chewing.

Hypoglossal Nerve

The twelfth cranial nerve that controls the movements of most of the tongue muscles.

Trigeminal Nerve

The fifth cranial nerve responsible for sensation in the face and motor functions such as biting and chewing.

Arbor Vitae

A term describing the tree-like appearance of the white matter in the cerebellum of the brain, which is crucial for transmitting nerve signals.

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