Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash. Introduction: Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Question

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Answer 1

Question

Chapter 17, Problem 1CTCR

Summary Introduction

To discuss: Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash.

Introduction:

Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Expert Solution & Answer

Explanation of Solution

If a firm has too much cash than it requires for the operations and planned expenses, then the excess cash have an opportunity cost. If a firm gathers large amounts of cash, it can be invested potentially in many possible ways.

Moreover, the excess cash on hand will lead to poorly thought-out decision of management. The thought is that maintaining the low level of cash pushes the management to pay careful attention to the capital spending and cash flow.

Conclusion

It is possible for the firm to have too much cash, where the additional cost is the opportunity cost.

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Answer 2

Question

Chapter 17, Problem 1CTCR

Summary Introduction

To discuss: Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash.

Introduction:

Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Expert Solution & Answer

Explanation of Solution

If a firm has too much cash than it requires for the operations and planned expenses, then the excess cash have an opportunity cost. If a firm gathers large amounts of cash, it can be invested potentially in many possible ways.

Moreover, the excess cash on hand will lead to poorly thought-out decision of management. The thought is that maintaining the low level of cash pushes the management to pay careful attention to the capital spending and cash flow.

Conclusion

It is possible for the firm to have too much cash, where the additional cost is the opportunity cost.

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Answer 3

Question

Chapter 17, Problem 1CTCR

Summary Introduction

To discuss: Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash.

Introduction:

Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Expert Solution & Answer

Explanation of Solution

If a firm has too much cash than it requires for the operations and planned expenses, then the excess cash have an opportunity cost. If a firm gathers large amounts of cash, it can be invested potentially in many possible ways.

Moreover, the excess cash on hand will lead to poorly thought-out decision of management. The thought is that maintaining the low level of cash pushes the management to pay careful attention to the capital spending and cash flow.

Conclusion

It is possible for the firm to have too much cash, where the additional cost is the opportunity cost.

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Answer 4

Question

Chapter 17, Problem 1CTCR

Summary Introduction

To discuss: Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash.

Introduction:

Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Expert Solution & Answer

Explanation of Solution

If a firm has too much cash than it requires for the operations and planned expenses, then the excess cash have an opportunity cost. If a firm gathers large amounts of cash, it can be invested potentially in many possible ways.

Moreover, the excess cash on hand will lead to poorly thought-out decision of management. The thought is that maintaining the low level of cash pushes the management to pay careful attention to the capital spending and cash flow.

Conclusion

It is possible for the firm to have too much cash, where the additional cost is the opportunity cost.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1CTCR

Summary Introduction

To discuss: Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash.

Introduction:

Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Expert Solution & Answer

Explanation of Solution

If a firm has too much cash than it requires for the operations and planned expenses, then the excess cash have an opportunity cost. If a firm gathers large amounts of cash, it can be invested potentially in many possible ways.

Moreover, the excess cash on hand will lead to poorly thought-out decision of management. The thought is that maintaining the low level of cash pushes the management to pay careful attention to the capital spending and cash flow.

Conclusion

It is possible for the firm to have too much cash, where the additional cost is the opportunity cost.

Answer 6

Chapter 17, Problem 1CTCR

Summary Introduction

To discuss: Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash.

Introduction:

Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Expert Solution & Answer

Explanation of Solution

If a firm has too much cash than it requires for the operations and planned expenses, then the excess cash have an opportunity cost. If a firm gathers large amounts of cash, it can be invested potentially in many possible ways.

Moreover, the excess cash on hand will lead to poorly thought-out decision of management. The thought is that maintaining the low level of cash pushes the management to pay careful attention to the capital spending and cash flow.

Conclusion

It is possible for the firm to have too much cash, where the additional cost is the opportunity cost.

Answer 7

Chapter 17, Problem 1CTCR

Summary Introduction

To discuss: Whether it is possible for a firm to have too much cash and the reason for the shareholders concern towards gathering large amounts of cash.

Introduction:

Cash management indicates a broad area of finance that involves the collection, handling, and cash usage. It includes evaluating the cash flow, market liquidity, and investments.

Answer 8

Expert Solution & Answer

Explanation of Solution

If a firm has too much cash than it requires for the operations and planned expenses, then the excess cash have an opportunity cost. If a firm gathers large amounts of cash, it can be invested potentially in many possible ways.

Moreover, the excess cash on hand will lead to poorly thought-out decision of management. The thought is that maintaining the low level of cash pushes the management to pay careful attention to the capital spending and cash flow.