Your fiRm Spends $82,000 a Week to Pay Bills and Maintain

question 76

Multiple Choice

Your firm spends $82,000 a week to pay bills and maintain a lower cash balance limit of $40,000. The standard deviation of the disbursements is $8,000. The applicable weekly interest rate is .07
Percent and the fixed cost of transferring funds is $55. What is your optimal upper cash limit based
On the Miller-Orr model?

• A) $86,693
• B) $87,119
• C) $87,238
• D) $88,009
• E) $88,236

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Definitions:

Nonprofit Organizations

Entities that operate for purposes other than generating profit, focusing on philanthropic, social, educational, or other community-serving objectives.

Marketing Efforts

Activities and campaigns undertaken by a company to promote its products or services and increase its market presence.

Generating Revenue

The process of making money through various activities like sales, services, and other commercial ventures.

Tony the Tiger

The advertising cartoon mascot for Kellogg’s Frosted Flakes cereal, known for his catchphrase, "They’re Gr-r-reat!"