What is the upper limit of their cash balance

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Reference no: EM131088059

The Cynster Corp. requires that their cash balance never dip below $100. The standard deviation of their monthly net cash flows is $200. The interest rate is 1% per month. The fixed transaction cost is $10.

1. What is the optimal cash balance? C*= $411

2. What is the upper limit of their cash balance? U*= $1033

Reference no: EM131088059

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