Sigma Plus Corporation Has a Variance of Daily Cash Flow

question 1

Essay

Sigma Plus Corporation has a variance of daily cash flow of $8. The daily interest rate is.021% (.00021). Sigma desires a minimum cash balance of $80. The fixed cost of a security transaction is $2.00. Using the Miller-Orr model, calculate Sigma's target cash balance, the upper limit on cash balances, and the average daily cash balance. Explain how this is used to manage cash.

Analyze the impact of government interventions in markets including taxation and tariffs.

Compare and contrast different types of rationing mechanisms beyond price such as queuing and ration coupons.

Understand the role of opportunity cost in assessing the true cost of commodities or services.

Grasp the concept of supply and demand elasticity and how changes in these affect market outcomes.

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