The Level of Cash a Firm Holds Is Irrelevant; It

question 25

True/False

The level of cash a firm holds is irrelevant; it can never be short of cash since a firm is able to raise new money instantly at a fair rate, while it can never have surplus cash since the firm can invest excess cash at a fair rate to earn a net present value (NPV) of zero.

---

Definitions:

Isotope

Forms of a specific chemical element distinguished by having identical proton counts yet varying quantities of neutrons within their cores.

Neutrons

Subatomic particles found in the nucleus of an atom with no electric charge.

Protons

Subatomic particles found in the nucleus of an atom, carrying a positive electrical charge.