Target cash balance and upper limit using miller-orr model

Assignment Help Financial Management

Reference no: EM132052898

Slap Shot Corporation has a fixed cost associated with buying and selling marketable securities of $40. The interest rate is currently .013 percent per day, and the firm has estimated that the standard deviation of its daily net cash flows is $80. Management has set a lower limit of $1,500 on cash holdings. Calculate the target cash balance and upper limit using the Miller-Orr model.

Reference no: EM132052898

Questions Cloud

Common method of disbursement or cash outflow control : Which of the following is a common method of disbursement or cash outflow control?

The forecast meets the firm financial targets : The process of determining whether the forecast meets the firm's financial targets is known as _____.

Firm debt-equity ratio in the absence of corporate taxes : Explain why the weighted average cost of capital is invariant to the firm’s debt-equity ratio in the absence of corporate taxes.

Reason for unfavorable labor quantity variance : Which one of the following is a reason for unfavorable labor quantity (efficiency) variance?

Target cash balance and upper limit using miller-orr model : Calculate the target cash balance and upper limit using the Miller-Orr model.

What is the debt-equity ratio after NNV undertakes project : What is the debt-equity ratio after NNV undertakes the project? What is the expected return of (unlevered) asset for NNV?

What should the target cash level : What should the target cash level and the upper limit be if the tolerable lower limit has been established as $160,000?

What should be the value of the put : If the effective annual risk-free rate of interest is 5% and there are four months until expiration, what should be the value of the put?

Target cash balance derived using inventory approach : What is the target cash balance derived using the inventory approach (i.e., Baumol model)?

User Account

All Pages