When a Firm Has Excessive Cash, Managers May Make Use

question 88

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

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Definitions:

Technology Companies

Firms that produce or provide technology products and services, including software development, electronics manufacturing, and information technology services.

Reported Performance

The presentation of a company's operational and financial achievements over a specific period, typically as stated in its financial statements.

P/E Ratio

The price-to-earnings ratio, a measure of a company's current share price relative to its per-share earnings.

Accounting Methods

Systems and rules used for measuring, tracking, and recording a company’s financial transactions, often influencing how income and expenses are reported.