Nielson Motors Has No Debt,and Maintains a Policy of Holding

question 43

Multiple Choice

Nielson Motors has no debt,and maintains a policy of holding $80 million in excess cash reserves,invested in risk free treasury securities currently yielding 3%.If Nielson is in the 35% marginal tax bracket,the cost of permanently maintaining this $80 million reserve is closest to:

• A)$0.85 million
• B)$1.6 million
• C)$24.0 million
• D)$28.0 million

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Definitions:

Curiosity

An intense eagerness to acquire knowledge or information.

Exploration

The act of searching, investigating, or traveling through new areas to learn about them.

Manipulation

The act of controlling or influencing someone or something to one's advantage, often in a deceptive or unfair manner.

Sexual Response Cycle

The sequence of physical and emotional phases that occur during sexual activity, including arousal, plateau, orgasm, and resolution.