{"id":53526,"date":"2024-04-15T23:55:16","date_gmt":"2024-04-15T23:55:16","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=53526"},"modified":"2024-04-15T23:55:16","modified_gmt":"2024-04-15T23:55:16","slug":"which-of-the-following-is-not-considered-by-miller-orr-model","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-is-not-considered-by-miller-orr-model\/","title":{"rendered":"Which of the following is not considered by Miller-Orr Model?"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9756503cf8a\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Variability in cash requirement                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Cost of transaction                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Holding cost                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    Total annual requirement of cash                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is D. Total annual requirement of cash.<\/p>\n<p>The Miller-Orr model is a cash management model that helps businesses determine the optimal level of cash to hold. The model takes into account the variability in cash requirements, the cost of transactions, and the holding cost of cash. The model does not take into account the total annual requirement of cash because this is not a relevant factor in determining the optimal level of cash to hold.<\/p>\n<p>The Miller-Orr model is a simple and effective way to manage cash. The model is based on the following assumptions:<\/p>\n<ul>\n<li>Cash flows are random.<\/li>\n<li>The cost of carrying cash is constant.<\/li>\n<li>The cost of a transaction is constant.<\/li>\n<li>The desired level of cash is constant.<\/li>\n<\/ul>\n<p>The model works by setting two levels for cash: a target level and a lower limit. The target level is the desired level of cash to hold. The lower limit is the minimum level of cash that the business should not fall below. When the cash balance falls below the lower limit, the business will make a purchase of cash. When the cash balance reaches the target level, the business will sell some of its cash.<\/p>\n<p>The Miller-Orr model is a useful tool for businesses that want to manage their cash effectively. The model is simple to use and can be customized to meet the specific needs of the business.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: Variability in cash requirement. This is a factor that is considered by the <div class=\"youtube-subscribe-container\">\r\n      <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>   <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> Miller-Orr model. The model takes into account the variability in cash requirements to determine the optimal level of cash to hold.<\/li>\n<li>Option B: Cost of transaction. This is a factor that is considered by the Miller-Orr model. The model takes into account the cost of transactions to determine the optimal level of cash to hold.<\/li>\n<li>Option C: Holding cost. This is a factor that is considered by the Miller-Orr model. The model takes into account the holding cost of cash to determine the optimal level of cash to hold.<\/li>\n<li>Option D: Total annual requirement of cash. This is not a factor that is considered by the Miller-Orr model. The model does not take into account the total annual requirement of cash because this is not a relevant factor in determining the optimal level of cash to hold.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which of the following is not considered by Miller-Orr Model?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-is-not-considered-by-miller-orr-model\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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