Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company spends 98,000 a week to pay bills and maintains a lower cash balance limit of 75,000. The standard deviation of the disbursements is

A company spends 98,000 a week to pay bills and maintains a lower cash balance limit of 75,000. The standard deviation of the disbursements is 12,200. The applicable interest rate is 4.36 percent and the fixed cost of transferring funds is 38. What is the optimal initial cash balance based on the BAT model?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

Please explain short term solvency and give an example

Answered: 1 week ago