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A firm uses the following model to determine the optimal level of cash balance (Q):  This formula is a modification of the economic order quantity (EOQ) formula used for inventory management. Assume that the fixed cost of selling marketable securities is $10 per transaction and the interest rate on marketable securities is 6% per year. The company estimates that it will make cash payments of $12,000 over a 1-month period. What is the average cash balance (rounded to the nearest dollar)?A. $1,000 B. $2,000 C. $3,464 D. $6,928 |