If cash flows change unpredictably, the firm should allow the cash balance to move within limits. a.
Question:
a. What three factors determine how far apart these limits are?
b. How far should the firm adjust its cash balance when it reaches the upper or lower limit?
c. Why does it not restore the cash balance to the halfway point?
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a The interest rate the cost of each transaction and the variability of cash flows b It shoul...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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