Your firm spends $110,000 a week to pay bills and maintain a lower cash balance limit of $50,000. The standard deviation of your disbursements is $15,000. The applicable interest rate is 5 percent
And the fixed cost of transferring funds is $50. What is your total cost of holding cash based on the
BAT model?
A) $2,674
B) $2,719
C) $5,348
D) $5,538
E) $5,509
Correct Answer:
Verified
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