The Tire Shop spends $47,200 a week to pay bills and maintains a lower cash balance limit of $12,000. The standard deviation of the disbursements is $3,800. The applicable weekly interest rate is .047 percent and the fixed cost of transferring funds is $49. What is the cash balance target based on the Miller-Orr model?
A) $48,152
B) $18,731
C) $38,909
D) $22,413
E) $47,726
Correct Answer:
Verified
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