ABC CorpDisburses $4 Million Annually and Keeps Idle Funds in Treasury

question 21

Multiple Choice

ABC Corp.disburses $4 million annually and keeps idle funds in Treasury bills which earn an average of 5 percent and incur a fixed cost of $35 each time a cash conversion is made.What is the average amount of cash that ABC Corp.should have on hand?

• A)$16,733
• B)$33,466
• C)$37,417
• D)$74,833

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Definitions:

Corporate Governance

The structures, policies, and practices in place within an organization to ensure accountability, fairness, and transparency in the company's relationship with its stakeholders.

Inside Directors

Board members who are also employees, officers, or stakeholders in the company, providing them with detailed knowledge of its business operations.

Outside Directors

Members of a company's board of directors who are not part of the company's day-to-day operations and are often brought in for their expertise or to provide an objective perspective.

Core Values

Fundamental beliefs or principles that serve as the foundation for an organization's culture, actions, and decisions.