A Firm with Unpredictable Cash Flows Is Trying to Set

question 71

Multiple Choice

A firm with unpredictable cash flows is trying to set upper and lower limits for cash balances.Which of the following factors will result in upper and lower limits being closer to each other?

• A)variance of the cash flows is low
• B)cost of trading securities is high
• C)interest rate is low
• D)current cash balance is low

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Definitions:

Online Bank Transfer

A method used to move money electronically from one bank account to another through internet banking services.

Customer Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or designated recipient.

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The action or process of designing a graphical symbol or emblem to represent an application, file, directory, or function on a digital interface.

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A record that includes details of suppliers from whom a business purchases goods or services.