The management of Darum Co have set a minimum cash balance of \($7,500.\) The average cost to the company of making deposits or selling investments is \($24\) per transaction. An analysis of cash flows over the last 12 months reveals a standard deviation of \($2,000\) per day. The average interest rate on investments is 4.6 per cent.
Calculate the spread, the upper limit and the return point for the cash account of Darum Co using the Miller–Orr model. Explain the relevance of these values for the cash management of the company.