Question regarding the optimal initial cash balance, Accounting Basics

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Question regarding the optimal initial cash balance

Problem:

Your firm needs $68,000 a week to pay bills. The standard deviation of the weekly disbursements is $9,500. The firm has established a lower cash balance limit of $40,000. The applicable interest rate is 6 percent and the fixed cost of transferring funds is $20.

Required:

Question: What is the optimal initial cash balance?

Note: Provide support for rationale.

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Accounting Basics: Question regarding the optimal initial cash balance

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