The Highly Liquid Investments That a Company May Invest in When

question 28

Multiple Choice

The highly liquid investments that a company may invest in when they temporarily have excess cash are called _____.

• A) cash equivalents
• B) bank overdrafts
• C) cash short and over
• D) vouchers

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Definitions:

Externalities

Costs or benefits that result from an economic activity and affect third parties who did not choose to incur that cost or benefit.

Diseconomies of Scale

The phenomenon where, as a firm scales up its production, the per unit cost starts to increase, typically due to inefficiencies.

Economies of Scale

Economies of scale occur when a company reduces costs per unit due to an increase in production, typically achieved through operational efficiency and larger volume production.