1. The Baumol model You are the newly appointed senior assistant to Hayley Henderson, the CFO of McMurphy Inc., a successful company with $90 million in sales. Following up on a comment made during the board meeting last week, Hayley Henderson has asked you to verify that the cash transfers between the company's portfolio of marketable securities and its principal bill-paying checking account are the lowest cost possible. Currently, McMurphy tends to fund its monthly cash requirements by either selling its marketable securities or borrowing funds in increments of $60,678. You have collected the following data and only need to complete your calculations to address Hayley Henderson's concerns and answer the questions that follow. (Note: To make your computations easier, round all dollar amounts to the nearest whole dollar.) Cash Transfer Data for McMurphy Inc. Monthly cash requirement $833,333 Return earned on marketable securities portfolio 11.00% Securities-to-cash conversion cost $25.00