The firm's desired cash level as determined by the tradeoff between carrying costs and shortage costs is called its _____________.

Name: The firm's desired cash level as determined by the tradeoff between carrying costs and shortage costs is called its _____________.
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Question

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The firm's desired cash level, determined by balancing carrying costs (the costs of holding cash) and shortage costs (the costs associated with running out of cash), is referred to as its target cash balance.

The Firm's Desired Cash Level as Determined by the Tradeoff