General Studies · Cash Management Models
A company with unpredictable cash flows should prefer the Miller-Orr model because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It assumes a constant daily cash usage rate
- 2It accommodates stochastic or fluctuating cash inflows and outflows✓
- 3It completely eliminates cash holding costs
- 4It maintains a single fixed optimal balance at all times
Correct answer
It accommodates stochastic or fluctuating cash inflows and outflows
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