Parkway Express needs $318,000 a week to pay bills.The standard deviation of the weekly disbursements is $31,000.The firm has established a lower cash balance limit of $60,000.The applicable interest rate is 4.5 percent and the fixed cost of transferring funds is $65.Based on the BAT model,what is the opportunity cost of holding cash?
A) $3,873
B) $4,918
C) $5,207
D) $109,283
E) $110,440
Correct Answer:
Verified
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