The elect co needs Ghc185,000 a week to pay bills. The standard deviation of the weekly disbursement is Ghc17,600. The firm has established lower cash balance limit of Ghv 75,000. The applicable interest rate is 5.5% and the fixed unit of transferring funds is Ghc47. Based on the BAT model. What is the optimal initial cash balance?
The elect co needs Ghc185,000 a week to pay bills. The standard deviation of the weekly disbursement is Ghc17,600. The firm has established lower cash balance limit of Ghv 75,000. The applicable interest rate is 5.5% and the fixed unit of transferring funds is Ghc47. Based on the BAT model. What is the optimal initial cash balance?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The elect co needs Ghc185,000 a week to pay bills. The standard deviation of the weekly disbursement is Ghc17,600. The firm has established lower cash balance limit of Ghv 75,000. The applicable interest rate is 5.5% and the fixed unit of transferring funds is Ghc47. Based on the BAT model. What is the optimal initial cash balance?
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