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Watkins Resources faces a smooth annual demand for cash of $ 1 . 5 million, incurs transaction costs of $ 7 5 every time the

Watkins Resources faces a smooth annual demand for cash of $1.5 million, incurs transaction costs of $75 every time the firm sells marketable securities, and can earn 3.7 percent on its marketable securities.
What will be its optimal cash replenishment level?

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