Which one of the following best represents the transaction motive for holding cash?
A) unexpectedly purchasing a competitor's firm
B) paying weekly wages and salaries
C) buying extra inventory in response to an unexpected sale offered by a supplier
D) increasing the minimum cash balance for the firm's main bank account
E) holding cash in anticipation that the firm may need to close for a few days if floodwaters keep rising
Correct Answer:
Verified
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