Asked by Pradeep Patil on Jul 18, 2024
Verified
Provide a definition for target cash balance.
Target Cash Balance
The optimal amount of cash that a company aims to hold to meet expected transactions, precautionary, and speculative needs.
- Distinguish the different incentives for cash retention and their ramifications on cash management methods.
Verified Answer
RG
Ruzan GrahamJul 24, 2024
Final Answer :
A firm's desired cash level as determined by the trade-off between carrying costs and shortage costs.
Learning Objectives
- Distinguish the different incentives for cash retention and their ramifications on cash management methods.