Your firm spends $82,000 a week to pay bills and maintains a lower cash balance limit of $40,000. The standard deviation of the disbursements is $8,000. The applicable weekly interest rate is .07
Percent and the fixed cost of transferring funds is $55. What is your cash balance target based on
The Miller-Orr model?
A) $40,778
B) $42,667
C) $46,067
D) $55,564
E) $61,712
Correct Answer:
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