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How BAT & Miller-Orr Models Influence Target Cash Balance

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Tori owns a company. To manage its cash, Tori transfers a certain amount of money into the company's checking account every two weeks. She is using which model?

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1. When a company sets an upper and lower limit of cash and adjusts only when the cash levels hit either limit, which model is it using?

2. What are the two costs to consider with the BAT model?

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About This Quiz & Worksheet

BAT and Miller-Orr models are the subjects for this combination of a quiz and worksheet. Questions will ask you about costs to consider when using the BAT model, and when a company will withdraw money using the Miller-Orr model, among related topics.

Quiz & Worksheet Goals

You can find the following topics on the quiz questions:

  • Identifying examples of each model
  • The optimal level of cash in the BAT model
  • When to withdraw money with the Miller-Orr model

Skills Practiced

  • Defining key concepts - ensure you can identify the BAT model when given an example
  • Information recall - remember what you have learned about cash flow and the BAT model
  • Knowledge application - use what you know to answer questions about when to invest money, based on the Miller-Orr model

Additional Learning

To review more, head to the lesson titled How BAT & Miller-Orr Models Influence Target Cash Balance. There, you can review the following extra details:

  • The problem with too much cash sitting in checking accounts
  • Comparing the two models
  • Choosing a model
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