Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be invested in government bonds earning 10 percent, then how much money should Jan's hold?
A. $8,000
B. $10,000
C. $6,000
D. $4,000
Answer: D
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In calculating GDP, the value of intermediate goods is eliminated by using the
A. value added method. B. distributive method. C. value association method. D. Federal Reserve method.