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Rama East India Ltd has a standard deviation of monthly net cash flows of Rs 200. The transaction cost of converting cash into marketable securities
Rama East India Ltd has a standard deviation of monthly net cash flows of Rs 200. The transaction cost of converting cash into marketable securities is Rs 100 and the interest is 12% p.a The minimum cash balance required per month is Rs 5000. You are required to calculate the upper limit, lower limit, and return limit for the business. You can make use of Miller and Orr's model for the calculation.
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