Illustrate miller-orr model recognises, Financial Management

Assignment Help:

Q. Illustrate Miller-Orr model recognises?

The Miller-Orr model recognises which cash balance requirements are likely to fluctuate and that active management is required in responding to these fluctuations. Especially attention is paid to the variability (or variance) of interest rates, cash flows and the transaction costs of adjusting cash balances. It is the variability of cash balances which is crucial to understanding cash management since this will depend directly on understanding how Frantic's operations (basically sales and production) vary. For an unstable business it is probable that large cash balances will need to be kept. Miller-Orr suggests a simple formula to estimate this although the formula itself is limited by the assumptions on which it rests.


Related Discussions:- Illustrate miller-orr model recognises

State the major decision of financial management, State the major decision ...

State the major decision of financial management The major decision of financial management is the decision relating to dividend policy. The dividend must be analysed in relat

Define the wave of mergers in the banking industry, What is behind the wave...

What is behind the wave of mergers in the banking industry? A: Various economic factors have caused banking institutions to merge over the past various years. These factors inclu

Cash flow statement, Given below are the cash flows of a project. Find out ...

Given below are the cash flows of a project. Find out the net present value of the project. Cost of capital is 18% and initial investment is Rs. 2,00,000. Year Cash Flows (lakhs)

Explain term financial intermediaries, Financial intermediaries Financi...

Financial intermediaries Financial intermediaries are significant to the efficient functioning of the financial markets as they act to bring the borrowers/companies and lenders

Time value of money, In order to provide for R10 million to build a new war...

In order to provide for R10 million to build a new warehouse in 5 years time, a company plans to make equal payments at the end of each six months into a fund which earns 9% per ye

What are government intervention in chromex plc, Government intervention ...

Government intervention The government might look for intervene in the take-over bid because of fears that the market share of the combined group would constitute a monopoly wh

State expectations theory of term structure of interest rate, State the exp...

State the expectations theory of the term structure of interest rates. Expectations theory: The expectations theory of the term structure of interest rates specifies that

Explain about the audit risk, Audit risk Obtain understanding of ac...

Audit risk Obtain understanding of accounting and internal control systems. Sufficient to plan audit and develop effective audit approach. Professional judgement to

What are implications of ownership rights by equity claims, What are the ma...

What are the main implications of ownership rights by equity claims? Ownership rights have two primary implications: a. First, equity holders can advantage by any raise in t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd