The excess cash balance is the amount available for investment by a firm if the desired minimum cash balance is less than the period's ending cash.

Question

Quizplus · Accepted Answer

The excess cash balance represents the amount of cash available for investments or other uses beyond the minimum cash balance level. This occurs when the firm's actual cash balance exceeds the desired cash balance level at the end of the period. Therefore, the statement is true.

The Excess Cash Balance Is the Amount Available for Investment