Problemthe burger stop spends euro52000 a week to pay bills, Ask an Expert

Accounting

Problem:

The Burger Stop spends €52,000 a week to pay bills and maintains a lower cash balance limit of €60,000. The standard deviation of the disbursements is €7,500. The applicable weekly interest rate is 0.04 percent and the fixed cost of transferring funds is €50.

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Question: What is your optimal average cash balance based on the Miller-Orr model?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168010

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