If a Firm Has Achieved Its Target Cash Balance the Net

question 17

Multiple Choice

If a firm has achieved its target cash balance the net present value is:

• A)positive because the cash balance is positive.
• B)zero because increasing the cash balance increases the interest cost.
• C)negative because the cash balance has a financing cost.
• D)positive because decreasing the cash decreases the cost of illiquidity.
• E)None of the above.

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Definitions:

Observational Learning

The process of observing and imitating the behavior of others.

Self-regulation

The ability of an individual to manage their own thoughts, feelings, and behaviors to achieve long-term goals.

Reinforce Themselves

The process whereby actions or behaviors are naturally strengthened or encouraged without external intervention.

Self-regulation

The ability to monitor and control one's own behavior, emotions, or thoughts, adjusting them in accordance with demands and goals.