Banks Can Resolve Cash Deficiencies by

question 25

Multiple Choice

Banks can resolve cash deficiencies by

• A) creating additional liabilities
• B) selling assets
• C) buying back common stock
• D) increasing dividend payouts
• E) A or B

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Definitions:

Fixed Budget

A financial plan that does not change or fluctuate with the volume of business activity.

Standard Costs

Predetermined costs for the production of goods or services, used as benchmarks to measure actual performance and manage costs.

Actual Costs

Actual costs are the genuine expenditures incurred by a company, as opposed to estimated costs, during a given period for production, services, or other activities.

Reasonableness

A test or criterion to evaluate whether the assumptions or outputs of a financial model or decision are logical and align with real-world expectations.