Donaldson, Inc. spends $79,000 a week to pay bills and maintains a lower cash balance limit of $20,000. The standard deviation of the disbursements is $10,000. The applicable weekly interest
Rate is .05 percent and the fixed cost of transferring funds is $45. What is your optimal upper cash
Limit based on the Miller-Orr model?
A) $62,396
B) $65,991
C) $76,691
D) $85,991
E) $95,588
Correct Answer:
Verified
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