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 optimal average cash balance based on
The BAT model?
A) $52,667
B) $53,479
C) $53,618
D) $53,998
E) $54,007
Correct Answer:
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