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Lake Side spends $22,406 a week to pay bills and maintains a lower cash balance limit of $15,000. The standard deviation of disbursements is $1,300.
Lake Side spends $22,406 a week to pay bills and maintains a lower cash balance limit of $15,000. The standard deviation of disbursements is $1,300. The applicable interest rate is 3.46 percent and the fixed cost of transferring funds is $38. What is the opportunity cost of holding cash based on the BAT model?
Multiple Choice
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$791
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$875
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$804
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$567
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$728
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