Which of the Following Is NOT a Motivation for Holding

question 21

Multiple Choice

Which of the following is NOT a motivation for holding cash?

• A) to meet its day-to-day needs
• B) to compensate for the uncertainty associated with cash flows
• C) to satisfy bank requirements
• D) to place in short-term investments

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Definitions:

Target Cost

The desired cost of a product that is determined by subtracting a desired profit margin from a competitive market price.

Product Cost Concept

The idea that all costs incurred to create a product, including direct labor, materials, and manufacturing overhead, are assigned to products.

Manufacturing Costs

The total cost related to producing goods, including raw materials, labor, and overhead expenses.

Markup

The amount added to the cost price of goods to cover overhead and profit, determining the selling price.