Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.
Finance questions - Please show how you arrived at the answer - $5.00
Halliday Inc. receives a $2 million payment once a year. Of this amount, $700,000 is needed for cash payments made during the next year. Each time Halliday deposits money in its account, a charge of $2.00 is assessed to cover clerical costs. If Halliday can hold marketable securities that yield 5 percent, and then convert these securities to cash at a cost of only the $2 deposit charge, what is the total cost for one year of holding the minimum cost cash balance according to the Baumol model?
a. $7,483
b. $187
c. $3,741
d. $374
e. $748