Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your firm needs $185,000 a week to pay bills. The standard deviation of the weekly disbursements is $10,000. The firm has established a lower cash

Your firm needs $185,000 a week to pay bills. The standard deviation of the weekly disbursements is $10,000. The firm has established a lower cash balance limit of $60,000. The applicable interest rate is 6 percent and the fixed cost of transferring funds is $35. Based on the BAT model, what is the optimal initial cash balance? $105,940 $83,693 $46,614 $52,970 $31,782

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Finance

Authors: Scott Besley, Eugene F. Brigham

3rd Edition

0324232624, 9780324232622

More Books

Students also viewed these Finance questions

Question

Does your message use defamatory language?

Answered: 1 week ago