What Are Opportunity Costs in the Context of Maintaining Cash

question 12

Multiple Choice

What are opportunity costs in the context of maintaining cash balances?

• A)Opportunity costs in this context are equal to the amount that a firm maintains in cash balances.
• B)Opportunity costs in this context reflect the costs to a firm of monitoring its cash balances and ensuring that its cash balances are sufficient.
• C)Opportunity costs in this context are the value of the lost opportunities that could not be pursued because a firm's money was being used to maintain cash balances.
• D)Opportunity costs in this context are equal to the firm's working capital.

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