Nielson Motors has no debt,and maintains a policy of holding $80 million in excess cash reserves,invested in risk-free treasury securities currently yielding 3%.If Nielson has a 21% corporate tax rate,the cost of permanently maintaining this $80 million reserve is closest to:
A) $0.85 million.
B) $16.8 million.
C) $24.0 million.
D) $28.0 million.
Correct Answer:
Verified
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