Precautionary cash balances
A) are necessary in case the firm has underestimated the amount of cash needed to cover transactions.
B) are necessary to cover scheduled outflows of funds during a cash budgeting period.
C) are necessary in case the firm has underestimated the amount of cash needed to cover transactions,and are also necessary to cover scheduled outflows of funds during a cash budgeting period.
D) none of the options
Correct Answer:
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