Question: Changes in Target Cash Balances indicate the likely impact of each of the following on a companys target cash balance. Use the letter I to

Changes in Target Cash Balances indicate the likely impact of each of the following on a company’s target cash balance. Use the letter I to denote an increase and D to denote a decrease. Briefly explain your reasoning in each case:

a. Commissions charged by brokers decrease.

b. Interest rates paid on money market securities rise.

c. The compensating balance requirement of a bank is raised.

d. The firm’s credit rating improves

e. The cost of borrowing increases.

f. Direct fees for banking services are established.

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