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
Percent 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
Correct Answer:
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