If a firm has achieved its target cash balance the net present value is:

Name: If a firm has achieved its target cash balance the net present value is:
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Question

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Achieving a target cash balance means the firm has optimized its cash holdings, balancing the costs of holding too much cash (such as forgone interest) against the benefits (such as liquidity). Therefore, the net present value of additional cash beyond this point is zero, as the marginal benefit of holding more cash equals its marginal cost.

If a Firm Has Achieved Its Target Cash Balance the Net