Question: Chaddy Ltd. is considering using the Miller-Orr model to manage its cash flows. The minimum cash balance would be $200,000 and the spread is expected

Chaddy Ltd. is considering using the Miller-Orr model to manage its cash flows. The minimum cash balance would be $200,000 and the spread is expected to be $75,000.

Required:

Calculate the Miller-Orr model upper limit and return point, and explain how these would be used to manage the cash balances of Chaddy Ltd.

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