Working Capital ManagementTU Board 2025
The Silver Corporation has a fixed cost associated with buying and selling marketable securities of Rs 100. The interest rate is currently 0.02 percent per day, and Silver has estimated that the…
5The Silver Corporation has a fixed cost associated with buying and selling marketable securities of Rs 100. The interest rate is currently 0.02 percent per day, and Silver has estimated that the standard deviation of its daily net cash flows is Rs 90. Management has set a lower limit of Rs 1,000 on cash holdings. Calculate the target cash balance and upper limit using the Miller Orr Model. What should company do when cash balance increases to upper limit?
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