Illustrate miller-orr model recognises, Financial Management

Q. Illustrate Miller-Orr model recognises?

The Miller-Orr model recognises which cash balance requirements are likely to fluctuate and that active management is required in responding to these fluctuations. Especially attention is paid to the variability (or variance) of interest rates, cash flows and the transaction costs of adjusting cash balances. It is the variability of cash balances which is crucial to understanding cash management since this will depend directly on understanding how Frantic's operations (basically sales and production) vary. For an unstable business it is probable that large cash balances will need to be kept. Miller-Orr suggests a simple formula to estimate this although the formula itself is limited by the assumptions on which it rests.

Posted Date: 7/12/2013 2:26:18 AM | Location : United States







Related Discussions:- Illustrate miller-orr model recognises, Assignment Help, Ask Question on Illustrate miller-orr model recognises, Get Answer, Expert's Help, Illustrate miller-orr model recognises Discussions

Write discussion on Illustrate miller-orr model recognises
Your posts are moderated
Related Questions
How would you explain transaction exposure? How is it different from economic exposure? Answer:Transaction exposure is the sensitivity of comprehend domestic currency values of

For capital budgeting decision which cost is relevant For capital budgeting decision, composite cost of capital is comparatively more relevant albeit the firm may finance one p

Recent surveys of corporate exchange risk management practices point out that many U.S. firms simply do not hedge. How would you explain this result? Answer:  There can be severa

Monte-Carlo Simulation Let us, for a shortwhile, leave the illustration for determining the price and consider a simpler illustration for understanding the Monte-Carlo method

using the operating cycle and any other financial management knoweledge,dicuss the applicability of such a cycle to the poultry biussiness in uganda (consider broilers)

Calculation of weighted average cost of capital (WACC) Market values Market value of equity = 5m × 4.50 = $22.5 million Market value of preference shares = 2.5m × .0762 =

Lenders in the US insist upon some kind of mortgage insurance. There are broadly two types of mortgage insurance - one is

Determine the meaning of Reportable segments Reportable  segments  are  operating  segments  or  aggregations  of  operating  segments  which meet specified criteria(core princ

Determine the Objectives of the Firm Objectives of the Firm - Profit Maximisation and Wealth Maximisation To put it simply, we may say that goal of any business is to max

identify five stakeholder groups and breifly explain their financil and other objectives