Which of the Following Is True Regarding the Opportunity Costs

question 234

Multiple Choice

Which of the following is true regarding the opportunity costs of holding cash and the size of the cash balance held by a firm?

• A) There is no relationship between cash balances and opportunity costs.
• B) The higher the cash balance, the higher the opportunity cost.
• C) Opportunity costs are minimized at the optimal cash balance.
• D) If a firm can reduce its collection float, opportunity costs will fall and the optimal cash balance for the firm will be increased.
• E) If a firm can reduce its collection float, opportunity costs will rise and the optimal cash balance for the firm will be decreased.

---

Definitions:

Line Managers

Managers who have direct responsibility over a specific department or team, involved in day-to-day operations and personnel management.

Organisation's Product

The result of a company's efforts, whether it's a tangible good, service, or digital offering, created to fulfill customer needs.

Small Work Group

A limited number of individuals assembled to perform tasks or achieve specific goals, characterized by close interaction and collaboration.

Non-Managerial Workers

Employees within an organization who are not in charge of supervising others and focus on executing tasks rather than managing.