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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.