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Assuming an annual opportunity cost of 2.5%, a fixed cost per securities transaction of $10, and total annual cash needs for the year of $200,000.

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Assuming an annual opportunity cost of 2.5%, a fixed cost per securities transaction of $10, and total annual cash needs for the year of $200,000. Assume that your firm wants to use the Miller-Orr model to optimize its cash holdings and has decided that its Lower Control Limit is $2, 500. Determine the firm's optimal cash position. Determine the firm's Upper Control Limit. Describe what should happen (including amounts $'s) if the firm reaches the Upper Control Limit. Describe what should happen (including amounts $'s) if the firm reaches the Lower Control Limit

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