When a Firm Has Excessive Cash, Managers May Make Use

question 45

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

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Definitions:

Problem Solving

A mental process and methodology used to analyze and find solutions to complex issues or obstacles.

Deeds

Legal documents representing the ownership of property or rights.

Contemplation

The action of looking thoughtfully at something for a long time or the act of thinking deeply about something, especially in a spiritual or introspective manner.

Team Concept

Belief in the principle that together everyone can accomplish more than each could do working alone; tapping the constructive power of the group by having clear and elevating goals, a results-driven structure, competent team members, unified commitment, a collaborative climate, standards of excellence, external support and recognition, and principled leadership.