Your Firm Spends $82,000 a Week to Pay Bills and Maintain

Your firm spends $82,000 a week to pay bills and maintain a lower cash balance limit of $40,000. The standard deviation of the disbursements is $8,000. The applicable weekly interest rate is.07 % and the fixed cost of transferring funds is $55. What is your optimal average cash balance based on the Miller-Orr model?

A) $59,062
B) $59,361
C) $60,008
D) $60,752
E) $61,404