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BullsNBears, a Purveyor of fiNancial Databases, Estimates It They Disburses

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BullsNBears, a purveyor of financial databases, estimates it they disburses $440,000 monthly in order to pay bills. The firm's opportunity rate is 5%. The fixed cost of transferring money is $25 per
Transfer. Based on historical data, the standard deviation of monthly cash flows is $15,000 and the
Lower cash balance limit is $20,000. For Miller-Orr model questions, assume the interest rate is
0) 5% per month.
Using the BAT model, what is the optimal average cash balance?

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Definitions:

Ownership Percentage

The fraction of an investment or business enterprise owned by an individual or entity, usually expressed as a percentage.

Bud Ltd.

is not a universally recognized key term; it might refer to a specific entity or business and its significance might vary by context. NO.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not control the company outright.

Consolidation Method

An accounting technique used for combining the financial statements of subsidiary companies with the parent company.

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