the seminole company wishes to apply the miller orr model to manage its cash investm 540148
The Seminole Company wishes to apply the Miller-Orr model to manage its cash investment. Seminole’s management has collected the following estimates:
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Cost per transaction Don't use plagiarized sources. Get Your Custom Essay on
the seminole company wishes to apply the miller orr model to manage its cash investm 540148
For $10/Page 0nly
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= $200 |
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Variance of daily cash flows |
= $10,000 |
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Opportunity cost of cash, per day |
= 0.05% |
Seminole management has figured, based on their experience dealing with the cash flows of the company, that there should be a cushion— a safety stock—of cash of $20,000. Calculate the following:
a. the lower limit
b. the return point
c. the upper limit
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