Optimal Cash Level Calculator (Miller-Orr Model)
This calculator uses the Miller-Orr model of cash management to compute a company's optimal level of cash and its upper limit on cash, given the fixed cost of a securities transaction, the company's daily cash variance, the daily interest rate, and the company's minimum cash balance.
- In the Miller-Orr model, when a company's cash balance reaches the upper or lower limit, the company should purchase or sell enough securities to return the cash balance to the optimal level.
Please enter the necessary parameter values, and then click 'Calculate'.