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7. Company A projects cash outflows to exceed inflows by $2 million over 4 months. If its opportunity cost for investment of cash is 3%
7. Company A projects cash outflows to exceed inflows by $2 million over 4 months. If its opportunity cost for investment of cash is 3% (effective annual rate of line of credit) and the fixed cost of obtaining cash is $50 per transaction.
a. What is the optimal transaction size for transfer of money into the cash account?
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