Sigma Plus Corporation has a variance of daily cash flow of $8. The daily interest rate is.021% (.00021). Sigma desires a minimum cash balance of $80. The fixed cost of a security transaction is $2.00. Using the Miller-Orr model, calculate Sigma's target cash balance, the upper limit on cash balances, and the average daily cash balance. Explain how this is used to manage cash.

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The Answer of Sigma Plus Corporation has a variance of daily cash flow of $8. The daily interest rate is.021% (.00021). Sigma desires a minimum cash balance of $80. The fixed cost of a security transaction is $2.00. Using the Miller-Orr model, calculate Sigma's target cash balance, the upper limit on cash balances, and the average daily cash balance. Explain how this is used to manage cash.

Sigma Plus Corporation Has a Variance of Daily Cash Flow