The reason that companies keep cash on hand to take care of unanticipated required outlays, such as unexpected repairs on equipment is best described as:

Question

Quizplus · Accepted Answer

The precautionary motive for holding cash refers to the need for companies to have liquid assets available to meet unexpected expenses, such as emergency repairs. This ensures that the company can cover unforeseen costs without having to secure external financing on short notice.

The Reason That Companies Keep Cash on Hand to Take