A firm that keeps current asset balances too high ____________.
A) sacrifices shareholder wealth
B) incurs higher risk
C) is not able to offer timely and profitable responses to prospective customers' needs
D) All of these are correct

Question

Quizplus · Accepted Answer

Keeping current asset balances too high can lead to a sacrifice in shareholder wealth because it may indicate that the firm is not investing excess cash in profitable ventures or is maintaining too much inventory, which can lead to higher holding costs and potentially lower returns on investment.

A Firm That Keeps Current Asset Balances Too High ____________