The Primary Reason That Managers Impose a Minimum Cash Balance

question 138

Multiple Choice

The primary reason that managers impose a minimum cash balance in the cash budget is

• A)because management needs discretionary cash for unforeseen business opportunities.
• B)managers lack discipline to control their spending.
• C)that it protects the organization from the uncertainty of the budgeting process.
• D)that it makes the financial statements look more appealing to creditors.

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Definitions:

Protons

Positively charged particles found in the nucleus of an atom, contributing to the atom's mass and atomic number.

Isotope

Variants of a chemical element that have the same number of protons but different numbers of neutrons in their atoms, affecting their atomic mass but not their chemical properties.

Electrons

Subatomic particles with a negative electric charge, found outside the nucleus of an atom.

Cobalt

A chemical element with symbol Co and atomic number 27, known for its blue-colored compounds and magnetic properties.