Donaldson,Inc.spends $94,000 a week to pay bills and maintains a lower cash balance limit of $25,000.The standard deviation of the disbursements is $13,000.The applicable weekly interest rate is 0.045 percent and the fixed cost of transferring funds is $52.What is your optimal average cash balance based on the Miller-Orr model?
A) $48,334
B) $57,623
C) $82,623
D) $236,334
E) $247,334
Correct Answer:
Verified
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