Henly inc recieve 2 million payment once a year. Of this amount 700000 is needed for cash payments made during the next year. Each time Henly deposit money in its account, a charge of 9.95$ is assessed to cover clerical costs. If Henly can hold marketable securities that yeild 5.0% and then convert these securities to cash at a cost of only the 9.95$ deposit charge, what is the total cost for one year of holding the minimum cost cash balance according to Baumol Model?

 

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