When a Firm Has Excessive Cash,managers May Make Use of the Funds

question 79

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
• E)hidden

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Definitions:

Disbursement Float

The time lag between a payment being made by a company and the actual withdrawal of funds from the company's account.

Deposited

Placing money into a financial account or institution for safekeeping or investment purposes.