Suppose that AFS Industries faces an annual demand for cash of ($2) million, incurs transaction costs of

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Suppose that AFS Industries faces an annual demand for cash of $$2$ million, incurs transaction costs of $$150$ every time it sells marketable securities, and can earn 6 percent on its marketable securities.

What will be the firm’s optimal cash replenishment level?

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M Finance

ISBN: 9781266827877

6th Edition

Authors: Marcia Cornett, Troy Adair, John Nofsinger

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Question Posted: May 29, 2024 09:02 AM

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Suppose that AFS Industries faces an annual demand for cash of ($2) million, incurs transaction costs of

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M Finance

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