The appropriate amount of short-term borrowing is determined by:

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The appropriate amount of short-term borrowing is determined by a combination of cash reserves, maturity hedging, and relative interest rates. Cash reserves are important because they provide a cushion in case of unexpected expenses or a temporary decrease in cash inflows. Maturity hedging refers to borrowing funds for a period of time that matches the expected period of cash outflows. This helps to avoid having to roll over short-term debt repeatedly, which can be costly. Finally, relative interest rates are important because borrowing costs can vary depending on prevailing market rates, so it's important to consider the best rate available when deciding how much to borrow. Therefore, all of the above factors should be taken into account when determining the appropriate amount of short-term borrowing.

The Appropriate Amount of Short-Term Borrowing Is Determined By