Why companies hold casn? Explain the properties of Baumol model (i.e. inventory prodel) and Miller-Orr model (i.e. stochastic model) for management of cash. Please determine the optimal/acceptable level of cash on the basis of financial data given below. 1. Let suppose, XYZ company plans to have $4 million in steady cash outlays for next year. Company believes that it will face an opportunity interest rate of 12% and will incur a cost of \$25 each time to convert marketable seattrities into cash. (Do not forget to compute total number of conversions, average balance of cash, and total cost) 2. The variance of daily net cash of ABC Company is $30,000. Company wishes to make the Transfer of funds from cash to marketable securities, and vice versa, as automatic as possible Company heard that it can be done by imposing upper-and-lower bound control limits. The current interest rate on marketable securities is 12% per annum. The fixed cost associated with each transfer is $150, and transfers are instantaneous. (Do not forget to determine the level of h and how much cash will be converted into marketable securities, how many marketable securities will be converted into cash, and average balance of cash)