Rearden Metal Has No Debt,and Maintains a Policy of Holding

question 61

Multiple Choice

Rearden Metal has no debt,and maintains a policy of holding $50 million in excess cash reserves,invested in risk free treasury securities currently yielding 4%.If Rearden is in the 40% marginal tax bracket,the cost of permanently maintaining this $50 million reserve is closest to:

• A)$0.8 million
• B)$1.2 million
• C)$20.0 million
• D)$30.0 million

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Definitions:

Multiple Causes

Multiple causes refer to the concept that most events or phenomena result from a complex interaction of various factors, rather than a single cause.

Objective Cause

An event or factor that independently exists and leads to a specific outcome or effect.

Subjective Causes

Factors perceived or experienced from an individual's own perspective, which can influence their thoughts, feelings, or behaviors.

Structuralism

A pioneering psychology branch that employed self-examination to investigate the basic architecture of the human psyche.