The Blue Moon Hotel and Spa Spends $359,000 a Week

question 21

Multiple Choice

The Blue Moon Hotel and Spa spends $359,000 a week to pay bills and maintains a lower cash balance limit of $250,000.The standard deviation of the disbursements is $46,800.The applicable weekly interest rate is 0.045 percent and the fixed cost of transferring funds is $60.What is the hotel's optimal upper cash limit based on the Miller-Orr model?

• A)$430,836
• B)$447,905
• C)$528,700
• D)$739,459
• E)$861,672

---

Definitions:

Computer Chips

Small electronic components made of semiconductor material, used to perform computing tasks and store data in various electronic devices.

Supply Curve

A graph showing the relationship between the price of a good and the quantity supplied, typically illustrating that as the price increases, the quantity supplied increases.

TV Technology

The set of technical aspects that make up the systems and devices for the transmission and reception of television signals, including both hardware and software innovations.

Crude Oil

An unprocessed, naturally found blend of hydrocarbon deposits and various organic substances, known as petroleum.