Cash equivalents are short-term investments that a company invests in to increase earnings.

Name: Cash equivalents are short-term investments that a company invests in to increase earnings.
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Cash equivalents are investments that can easily be converted to cash, such as Treasury bills or money market funds. Companies invest in cash equivalents to earn a higher return than they would by keeping the funds in cash, while still having the ability to quickly access the funds if needed.

Cash Equivalents Are Short-Term Investments That a Company Invests in to Increase