Assume that a manufacturing company is determining the optimal minimum level of cash to maintain in a financial institution to cover short-term needs. Separately consider each of the following scenarios, a through \(g\), and determine whether each item would be more likely to cause the optimal minimum level of cash to increase or decrease.

a. The company opened a new short-term line of credit.

b. Management is uncertain about the timing of cash inflows and outflows related to a new product launch.

c. The company signed a loan with a debt covenant requiring compliance with a minimum current ratio level.

d. The company is intent on maintaining its favorable bond rating on bonds outstanding.

e. The company's cost of capital increased.

f. Timing between when supplies are purchased for production and when cash is ultimately received from the sale of the final product is expected to vary month to month due to a change in market conditions.

g. Short-term borrowing costs increased.