A Firm Has Estimated That It Will Need $3,000,000 Net

question 64

Multiple Choice

A firm has estimated that it will need $3,000,000 net cash during the year.Current interest rate on money market securities is 6 percent per year and the cost of buying and selling securities cost $50 per transaction.What is the optimal transaction size of securities?

• A)$70,710.68
• B)$25,100.00
• C)$65,285.21
• D)$92,511.11

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Definitions:

Foreign Firm

A company that is based in one country while conducting business operations in one or more other countries.

Free Trade

An economic policy that allows imports and exports among countries with minimal or no tariffs, quotas, or other restrictions.

Chinese Product

Products manufactured in China, often highlighted in discussions about global trade, manufacturing practices, and economic policies.

American Manufacturers

Companies based in the United States that produce and sell goods within the country and/or internationally.