The Norris Company Is Trying to Determine Its Optimal Average

question 13

Multiple Choice

The Norris Company is trying to determine its optimal average cash balance. The firm has determined that it will need $5,000,000 net new cash during the coming year. The fixed transaction cost of converting securities to cash is
$50, and the firm earns 10 percent on its marketable securities investments.
-What will be the total cost to Norris of maintaining the optimal average cash balance, as determined by the Baumol model?

• A) $35,356
• B) $ 7,071
• C) $18,493
• D) $70,711
• E) $53,190

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Definitions:

Hypnotic Suggestion

A directive given to an individual during hypnosis intended to influence their thoughts, behaviors, or perceptions.

Memory Distortion

A phenomenon where one's recollection of events or information is altered, incorrect, or influenced by subsequent experiences or misinformation.

Credible Reports

Documents or accounts considered to be reliable and trustworthy based on evidence or reputation.

Sexual Abuse

Any non-consensual sexual act or behavior imposed on an individual, causing physical or emotional harm.