The target cash balance for a firm that follows a flexible cash management policy is the point at which ____________.

A) Opportunity costs are minimized.
B) Opportunity costs are equal to trading costs.
C) Total costs just exceed the minimum cash balance.
D) Total costs are just below their maximum.
E) Transactions costs are maximized.

Flexible Cash

Funds that are readily available for use without restrictions or conditions, allowing for immediate allocation or investment.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on.

Trading Costs

Expenses associated with buying and selling securities, including broker commissions and the bid-ask spread.