MSU's assistant treasurer wants to use the Miller-Orr Model to determine the optimal transfer amount...
60.1K
Verified Solution
Link Copied!
Question
Finance
MSU's assistant treasurer wants to use the Miller-Orr Model to determine the optimal transfer amount and has developed the following parameters: an annual opportunity cost is 12%, a fixed cost per securities transaction is $75, total annual cash needs for the year is $500,000, lower control limit = $5,000, and variance of daily cash flows = $25,000.
What should the cash return level be?
What is the optimal value of upper control limit?
What is the average cash balance?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
