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

WACC, WHY ORDINARY SHARES DIFFER IN DIFFERENT COMPANIES

WHY ORDINARY SHARES DIFFER IN DIFFERENT COMPANIES

Define believe an increased common stock cash dividend, Do you believe an i...

Do you believe an increased common stock cash dividend can send a signal to the common stockholders?  If so, what signal might it send? An increase in cash dividends is frequentl

What is percentage of sales method, Q. What is Percentage of Sales Method? ...

Q. What is Percentage of Sales Method? Percentage of Sales Method: - Under this process certain key ratios based on past year's information are established. These ratios is abl

Explain rate of the stock turnover, Q. Explain Rate of the stock turnover? ...

Q. Explain Rate of the stock turnover? Rate of the stock turnover: this is high degree of the inverse co relation between the quantum of the working capital requirement and the

Operating cycle, Discuss the applicability of the operating cycle to poultr...

Discuss the applicability of the operating cycle to poultry business in Uganda(consider broilers)

Describe the benefits of wealth maximisation criterion, Describe the benefi...

Describe the benefits of Wealth maximisation criterion Value of an asset must be viewed in terms of the benefits it can produce. Worth of a course of action can similarly be ju

Benefit and drawback of maintaining many manufacturing sites, Discuss the b...

Discuss the benefits and drawbacks of maintaining multiple manufacturing sites like a hedge against exchange rate exposure. Answer:  To set up multiple manufacturing sites can

Treasury bonds, Bonds issued by the government are termed as treasury...

Bonds issued by the government are termed as treasury bonds. For example, dated securities issued by the government. These bonds are normally issued for longer ma

Treasury coupon securities and bills, Many practitioners feel that in...

Many practitioners feel that instead of using only on-the-run issues, all treasury coupon securities and bills are to be used for constructing the theoretical spo

How a firm determines the optimal level of current assets, Explain how a fi...

Explain how a firm determines the optimal level of current assets. The best possible level of working capital is determined by finding the amount that balances the need for liq

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