If Cash Flows Change Unpredictably, Then Management Should Allow the Cash

question 81

Essay

If cash flows change unpredictably, then management should allow the cash balance to move within limits.What three factors determine how far apart these limits? How far should the firm adjust its cash balance when it reaches this upper or lower limit?

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Definitions:

Randomly

Without a specific pattern, purpose, or objective; happening by chance.

Without Bias

an approach or stance that is impartial, fair, and not influenced by personal or societal prejudices.

Open Questions

Open Questions are designed to encourage a full, meaningful answer beyond a simple yes or no, often facilitating deeper discussion or understanding.

Complexities

The state or quality of being intricate or complicated, refers to the various difficult factors or features involved in a situation.