List Three Factors That Affect a Company's Desired Minimum Cash

question 49

Essay

List three factors that affect a company's desired minimum cash balance.

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Definitions:

Monthly Compounded

Monthly compounded refers to the process of calculating interest on a principal amount where the interest is added to the principal at the end of each month, thereby earning interest on interest in subsequent months.

Effective Rate

The interest rate on a loan or investment, adjusted for the effect of compounding.

Interest Rate

The rate at which a borrower is charged interest for the money borrowed from a lender.

Cash Rebate

A partial refund to someone who has paid too much money for tax, rent, or a utility, or as a promotional incentive from the purchase of goods or services.