Gemini Inc

question 14

Multiple Choice

Gemini Inc.'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.On what opportunity cost of holding cash was this analysis based?

• A) 19.2%
• B) 10.4%
• C) 6.3%
• D) 12.1%
• E) 9.6%

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