Q150
Miller- Orr Model is suitable in those circumstances when the ________.
A.
Demand for cash is steady
B.
Demand for cash is not steady
C.
Carry cost and transaction cost are to be kept at minimum
D.
Demand for cash is variable
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
The Miller-Orr model of cash management is developed for businesses with uncertain cash inflows and outflows. This approach allows lower and upper limits of cash balance to be set and determine the return point (target cash balance).