If a firm has achieved its target cash balance the net present value is:
A) positive because the cash balance is positive.
B) zero because increasing the cash balance increases the interest cost.
C) negative because the cash balance has a financing cost.
D) positive because decreasing the cash decreases the cost of illiquidity.
E) None of these.
Correct Answer:
Verified
Q2: Collection float increases:
A) disbursement float.
B) bank cash.
C)
Q3: The target cash balance is reached when:
A)
Q4: The cost of holding cash:
A) is the
Q5: Firms hold cash to satisfy the transaction
Q6: Determining the appropriate target cash balance involves
Q8: A firm with low cash balances will
Q9: In determining the firm's target cash balance,trading
Q10: A financial manager should be concerned about
Q11: The difference between bank cash and book
Q12: Firms hold cash,in part,to satisfy compensating balances.
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