If There Are Large Fluctuations in a Firm's Cash Flows

question 12

True/False

If there are large fluctuations in a firm's cash flows, or if there are large costs associated with selling securities, then the firm should hold relatively small average cash balances.

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Definitions:

TPS

Transaction Processing System, a type of information system that collects, stores, modifies, and retrieves the data transactions of an enterprise.

ERP II

Enterprise Resource Planning II, an evolution of ERP software that includes web-based collaboration and automation capabilities across an enterprise.

ERP III

The third generation of Enterprise Resource Planning software, focusing on extending traditional ERP systems to connect with the internet, e-commerce, and other external operations.

ERP

Organizations leverage Enterprise Resource Planning software to handle everyday business tasks such as accounting, procurement, project management, and manufacturing.