The finance director of Chessington Inc. is reviewing their target c in light of their varying cash inflows. You decide that the Miller-Orr provide some useful guidelines. Given a lower cash balance leve standard deviation of monthly net cash flows of $700 and a mor rate of 0.5%. Transaction costs of switching from market securiti are $15 per transaction on average. I (a). Calculate the target cash balance. (b). Calculate the upper cash limit. (c). Calculate the average cash balance.

The finance director of Chessington Inc. is reviewing their target c in light of their varying cash inflows. You decide that the Miller-Orr provide some useful guidelines. Given a lower cash balance leve standard deviation of monthly net cash flows of $700 and a mor rate of 0.5%. Transaction costs of switching from market securiti are $15 per transaction on average. I (a). Calculate the target cash balance. (b). Calculate the upper cash limit. (c). Calculate the average cash balance.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 1hM

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