What are implicit transaction costs that MNCs incur in dealing with their cash balances?
A)Implicit transaction costs are costs of dealing with a firm's cash balances that are not disclosed to the firm until after the transaction is completed.
B)Implicit transaction costs incurred in dealing with an MNC's cash balance involve costs associated with making internal decisions about the firm's cash balance.
C)Implicit transaction costs are costs of arranging the firm's cash balances that the firm will not have to pay until a later time.
D)Implicit transaction costs are costs that are charged to a firm in connection with managing its cash balances that will be deducted from the firm's cash balance rather than being billed to the firm.

Question

Quizplus · Accepted Answer

Implicit transaction costs are costs that are incurred in managing a firm's cash balances but are not easily identified or measured. These costs are not explicit, meaning that they are not readily apparent and are often not reflected in financial accounting information. Examples of implicit transaction costs include costs associated with making internal decisions about the firm's cash balance, such as the opportunity cost of holding too much or too little cash, and costs associated with managing the firm's relationships with banks and other financial institutions.

What Are Implicit Transaction Costs That MNCs Incur in Dealing