When Using a Cash Control Model Which Targets a Specific

question 26

Multiple Choice

When using a cash control model which targets a specific cash balance, what is the problem associated with the cash level breaching the upper, outer limit for an unacceptable length of time?

• A) The inability to meet short term financial commitments.
• B) The risk of theft.
• C) The opportunity cost of foregone interest.
• D) A rise in the cost of capital.
• E) A negative impact on the company's credit rating.

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Definitions:

Justiciable Controversy

A controversy that is real and substantial, as opposed to hypothetical or academic.

Substantial Controversy

A significant dispute between parties that involves real and substantial issues which require legal assessment and resolution.

Standing to Sue

The legal right to bring a lawsuit to court, based on having a sufficient connection to and harm from the law or action challenged.

Defectively Manufactured

Refers to products that are improperly made or produced, leading to potential harm or failure.