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

question 19

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 optimal cash sale
• =
• =
• = $74,833