The Snow Hut has analyzed the carrying and shortage costs associated with its cash holdings and determined they should ideally maintain a cash balance of $5,200. This $5,200 represents which one of the following?

Question

Quizplus · Accepted Answer

The $5,200 represents the target cash balance, which is the ideal amount that a company should maintain in order to balance the carrying and shortage costs associated with cash holdings.

The Snow Hut Has Analyzed the Carrying and Shortage Costs