A firm taking a conservative approach with respect to its cash balance is most likely to be:
A)holding as much credit as possible.
B)holding as much cash as possible.
C)holding as much borrowing ability as possible.
D)holding as much long-term debt as possible.

Question

Quizplus · Accepted Answer

A firm taking a conservative approach with respect to its cash balance aims to hold as much cash as possible to be able to cover unexpected expenses, downturns in the market, or other uncertain events. This approach can also provide a safety cushion for financing future growth or investments. Holding credit, borrowing ability, or long-term debt would not provide the same level of security as holding cash.

A Firm Taking a Conservative Approach with Respect to Its