Probably the Most Sensible Cash Management Policy Would Be to Maintain

question 30

Multiple Choice

Probably the most sensible cash management policy would be to maintain:

• A)sufficient cash on hand to meet all ordinary business needs plus some excess cash to invest in marketable securities as a precautionary measure.
• B)about 90 percent of the firm's ordinary cash needs in cash and delay payment on the remaining 10 percent.
• C)enough cash on hand to meet any potential demand for cash.
• D)a zero-cash balance and transfer funds semi-monthly to pay bills.
• E)twice the amount of cash on hand that would be typically indicated based on the firm's normal cash flows.

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Definitions:

Histogram

A graphical representation of data using bars of different heights to show the distribution of values in a dataset.

Intervals

A range between two numbers or points on a line, often used in mathematics and statistics to denote a span of values.

Equally Wide

Referring to intervals or bins in a histogram or distribution that have the same width, ensuring uniformity in data representation.

Histogram

A graphical representation of data using bars of different heights to show the frequency of values in a dataset.