When a Firm Has Excessive Cash, Managers May Make Use

question 88

Multiple Choice

When a firm has excessive cash, managers may make use of the funds in an inefficient manner. This is also referred to as the ________ cost of retaining cash.

• A) fixed
• B) agency
• C) interest
• D) special

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Definitions:

Sales Contract

A legal agreement between a buyer and a seller detailing the terms and conditions of the sale of goods, services, or property.

Express Designation

A specified or clearly stated appointment, selection, or naming of an individual or entity for a particular role or responsibility.

Identification

The process by which a specific property is designated as the subject of a sales or security agreement.

Contract

A legally binding agreement between two or more parties that outlines the terms and conditions for an exchange of goods or services.