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Clarks Back Ltd (CBL) uses the Miller-Orr model to determine when, and by how much, to top up its cash balance. CBL's treasurer has determined

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Clarks Back Ltd (CBL) uses the Miller-Orr model to determine when, and by how much, to top up its cash balance. CBL's treasurer has determined the following: - the fixed cost associated with buying and selling marketable securities is $200. - the interest rate is currently 0.025 percent per day - estimated standard deviation of daily net cash flows is $125 If management sets a lower limit of $2,500 on cash holdings, calculate both the target cash balance and the upper limit using the Miller-Orr model

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