In regards to the BAT and Miller-Orr cash management models, the lower the uncertainty of cash flows, the higher the target cash balance.

Question

Quizplus · Accepted Answer

Both the BAT (Baumol-Tobin model) and Miller-Orr models suggest that with lower uncertainty in cash flows, a company can maintain a lower target cash balance because it can predict its cash needs more accurately and thus minimize holding costs.

In Regards to the BAT and Miller-Orr Cash Management Models