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Nielson Motors has no debt, and maintains a policy of holding $70 million in excess cash reserves, invested in risk-free treasury securities currently yielding 4%.
Nielson Motors has no debt, and maintains a policy of holding $70 million in excess cash reserves, invested in risk-free treasury securities currently yielding 4%. If Nielson has a 20% corporate tax rate, the cost of permanently maintaining this $70 million reserve is closest to:
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