The Miller-Orr Model

The Miller-Orr model:

A) Increases the target cash balance as interest rates increase.
B) Assumes that cash outflows are both steady and known with certainty.
C) Is the simplest model for determining the optimal level of cash.
D) Assumes that the average change in the cash balance is equal to the optimal deposit amount.
E) Considers the effects of uncertainty created by random fluctuations in cash flows.