Wilson Products Ltd estimates that the standard deviation of its daily change in cash balance is $30000. The fixed cost of each withdrawal and injection of cash is $10 and the daily management yield on its investment is 0.0006. Wilson does not operate on an overdraft.
Calculate the target level and upper limit for a cash management approach that uses the Miller and Orr model. What problems do you foresee if approach is implemented?© BrainMass Inc. brainmass.com June 3, 2020, 7:04 pm ad1c9bdddf
Target cash balance is computed for you and four problems are mentioned. No references.