Gemini Inc.'s optimal cash transfer amount, using the Baumol model, is $60,000.The firm's fixed cost per cash transfer of marketable securities to cash is $180.In addition, the total estimated cash costs (transfers and carrying cost) for the firm, based on 16 transactions per year, are $5,760.On what opportunity cost of holding cash was this analysis based?
A) 19.2%
B) 10.4%
C) 6.3%
D) 12.1%
E) 9.6%

Question

Quizplus · Accepted Answer

The Answer is E