Some approaches for determining the target minimum cash balance include:
A) one to three months of cash expenses
B) worst case scenario analysis
C) residual cash retention.
D) A and B
E) A, B, and C

Question

Quizplus · Accepted Answer

Determining the target minimum cash balance often involves keeping one to three months of cash expenses to cover operational needs (A) and conducting a worst-case scenario analysis to ensure financial stability in unforeseen circumstances (B). Residual cash retention (C) is not a standard approach for determining minimum cash balances.

Some Approaches for Determining the Target Minimum Cash Balance Include