1) A position when the cash balance amount is on the most ideal proportion so that the company has the ability to invest the excess cash for a return or profit and at the same time have sufficient liquidity for future needs.

A. Optimal balance

B. Upper control limit

C. Lower control limit

D. None of the above

2) A finance manager must know the trade-off between the opportunity costs associated with holding too much cash against the shortage costs of not having enough cash? TRUE OR FALSE?

3) Cash inflows are more certain in seasonal industries. True or false?

4) It indicates the minimum amount of cash that should be maintained to meet the firm's obligations.

A. Cash break-even chart

B. Miller and Orr model

C. Baumol's model

D. None of the above