Asked by Emily Jackson on Jul 12, 2024
Verified
One disadvantage of the BAT model is the fact that it assumes all cash outflows are known with certainty.
BAT Model
BAT Model stands for the Behavioral Analysis and Therapy Model, which is typically related to psychology and behavioral sciences, not a common term in finance and hence might be mistaken or the context misidentified.
Cash Outflows
Money that exits a company, typically as a result of operational expenses, investment activities, and financing.
- Analyze the upsides and downsides of the BAT model in predicting liquidity requirements and streamlining cash operations.
Verified Answer
CM
Charles MwansaJul 14, 2024
Final Answer :
True
Explanation :
The BAT model (Baumol-Tobin model) assumes that cash outflows are known with certainty, which is a limitation because in reality, cash needs can be unpredictable and vary over time.
Learning Objectives
- Analyze the upsides and downsides of the BAT model in predicting liquidity requirements and streamlining cash operations.