Which of the following is not a motive for a corporation to hold cash balances?
A) transactions
B) float
C) precautionary
D) speculative

Question

Quizplus · Accepted Answer

Float is not a motive for a corporation to hold cash balances. Float refers to the delay between when a payment is made and when it is received. Holding cash balances does not reduce float, as it is a factor of the payment system and not the corporation's cash management strategy. The other motives for a corporation to hold cash balances are to facilitate transactions, provide a precautionary cushion, and enable speculative investments.

Which of the Following Is Not a Motive for a Corporation