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    Investment in Marketable Securities

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    A firm expects to have funds of $150,000 idle for 60 days. If the firm could purchase marketable securities yielding 10 percent and pay brokerage fees of $1,500, the firm _________.

    (a) should make the investment since interest earned exceeds brokerage fees

    (b) should not make the investment since brokerage fees exceed interest earned

    (c) should leave the $150,000 in cash

    (d) should invest the funds for more than 60 days due to the favorable rate

    Please advise answer & why. Thanks so very much!!

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    Solution Preview

    It should leave the $150,000 in cash.

    If it invests it does get $2500 which is more than the ...

    Solution Summary

    The solution explains whether to invest idle funds in marketable securities