Management of Working Capital – Miller Orr Model (example 3)

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1. says

Thanks again for the superb lecture,my question is directed at the miller orr model.
must we always convert the interest rate and the variance/deviation to per day or we can calculate it using per annum?

• says

We would normally do it per day.

(It is very unlikely these days that the examiner would ask for calculations of the spread – more recently he has given you the spread and asked for the upper level and the return point.)

2. says

SIR THERE IS NO VIDEO RELATED TO WORKING CAPITAL FUNDING STRATERGY WHICH IS THERE IN THE SYLLABUS FOR F-9 PAPER

• says

Four things:

1) Of course there is a video – why don’t you watch them in order and then you will see it!!!
(I know exactly what is in the syllabus, and it is covered in the first lecture on working capital).

2) Do not write in capitals.

3) If you have any questions then ask in the Ask the Tutor forum – not as a comment on a lecture on something different!

4) We do not claim to lecture on every single line of the syllabus. Our lectures are what we teach on courses – some things you have to read for yourself in the free Lecture Notes!

3. says

Hi John,

I just wanted to say a HUGE THANKYOU to you and for your free lectures and course notes. After sitting this exam 4 times, I was at my wits end, so decided to take a different approach to learning. Many people told me not to have the faith in open tuition as it is free, but here I am on results day with a huge smile on my face because I have passed.

I can now move on to my professional level exams and will be one step closer to being qualified!!!

THANKYOU SO SO MUCH.

Sam 😀

• says

Hi Sam

Thank you very much for your comments, and many congratulations on having passed.
I am very pleased indeed for you

All the best for your next exams

4. says

I am stuck on how to put it in the calculator.
I first put in 3/4 x 5 x 2,000 squared, divided by 0.00014.
On my scientific calculator this gives me 1.071428571 x 10 to the power of 11. How do I then go from here to putting in the cubed root and getting an answer of \$4,750?
Everytime I push the cubed root button it throws up an error.

• says

Sorry, but I cannot help because different calculators work in different ways.
Have you looked at the instruction book for the calculator?

• says

Yes, but no help. My main issue is how to get from 1.0714 to the power of 11 to the cubed root. Do I multiply it by cubed root or just put 1.0714 the push thecubed root button? It has been years since I was at school so my knowledge on these calculations is very scratchy.

• says

You certainly don’t multiply by the cubed root.

On my calculator you simply press the cubed root button.