Keeping a large surplus of cash and investing it in Treasury bills will bring positive NPV to a firm.

Question

Quizplus · Accepted Answer

Investing in Treasury bills typically results in lower returns compared to other investment options, such as stocks or bonds. Since the cost of capital for a firm is typically higher than the return on Treasury bills, investing in them may not generate a positive net present value (NPV) for the firm. Therefore, the statement is false.

Keeping a Large Surplus of Cash and Investing It in Treasury