A projected excess cash balance for the month may be

Question

Quizplus · Accepted Answer

Projected excess cash balance for the month should be invested in marketable securities, which are short-term securities with maturities less than one year. This allows the company to earn interest on the excess cash until it is needed for future operations or investment opportunities. Financing with long-term securities (choice A) is not appropriate for short-term excess cash balances, as these securities have longer maturities and are typically used for larger financing needs. Financing with short-term securities (choice B) is not necessary as the company already has excess cash, and these securities may incur additional expenses such as issuance costs. Investing in long-term securities (choice C) would not be appropriate as the company may need to access the cash in the near future, so they should invest in securities with shorter maturities to ensure liquidity.

A Projected Excess Cash Balance for the Month May Be