Question: If cash flows change unpredictably, the firm should allow the cash balance to move within limits. a. What three factors determine how far apart these

If cash flows change unpredictably, the firm should allow the cash balance to move within limits.
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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