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5. ABB Ltd is trying to determine whether its cash management strategy is optimal. The company generates 20,000 excess cash each month, which it intends

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5. ABB Ltd is trying to determine whether its cash management strategy is optimal. The company generates 20,000 excess cash each month, which it intends to invest in short-term marketable securities. The interest rate it expects to earn on such investments is 7 per cent per year. The transaction costs related to each individual investment in short-term marketable securities is a constant 115. Use the BAT model to find: (a) The optimal amount that should be invested in each transaction. (b) The number of transactions there will be each year. (c) The annual cost of making these transactions. (d) The annual opportunity cost of holding cash. Is the current cash management strategy optimal? Explain why or why not

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