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C. Harmony Limited has as annual demand for cash of $3 000 00. The firm can earn 4.5% on its marketable securities and incurs transactions

C. Harmony Limited has as annual demand for cash of $3 000 00. The firm can earn 4.5% on its marketable securities and incurs transactions cost of $75 every time it sells marketable securities. Use the Baumol Model to compute the firms optimal cash replenishment level. (5 marks)

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