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:

Measured

Quantified or assessed in terms of quantity, degree, or size.

GDP

Gross Domestic Product refers to the aggregate value of all products and services generated inside a nation's boundaries over a defined time frame.

Law Eliminating Holidays

A hypothetical regulation that would remove public holidays from legal recognition, potentially affecting work schedules and compensation.

Leisure

Time spent away from business, work, job hunting, domestic chores, and education, as well as necessary activities such as eating and sleeping.