The Visual Fit Method Is the Most Objective Way to Fit

question 39

True/False

The visual fit method is the most objective way to fit a line to cost data.The visual fit method is very subjective and not very exact.

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Definitions:

Transaction Motive

The need to hold cash to satisfy normal disbursement and collection activities associated with a firm’s ongoing operations.

Liquidity

Measures the ease with which an asset can be converted into cash without significantly affecting its price.

Speculative Motive

The need to hold cash to take advantage of additional investment opportunities, such as bargain purchases.

Liquidity

The ability of an asset to be converted into cash quickly and without any significant loss in value.