1. Cash Management [LO3] Is it possible for a firm to have too much cash? Why would shareholders care if a firm accumulates large amounts of cash? 2. Cash Management (L03) What options are available to a firm if it believes it has too much cash? How about too little? 3. Agency Issues [LO3] Are stockholders and creditors as w uch cash a firm should keep on hand? 13. Float [LO1] An unfortunately common practice goes like this warning: don't try this at home): Suppose you are out of money in your checking account; however, your local grocery store will, as a convenience to you as a customer, cash a check for you. So, you cash a check for $200. Of course, this chock will bounce unless you do something. To prevent this, you go to the grocery the next day and cash another check for $200. You take this $200 and deposit it. You repeat this process every day, and, in doing so, you make sure that no checks bounce. Eventually, manna from heaven arrives (perhaps in the form of money from home), and you are able to cover your outstanding checks. 1. Cash Management [LO3] Is it possible for a firm to have too much cash? Why would shareholders care if a firm accumulates large amounts of cash? 2. Cash Management (L03) What options are available to a firm if it believes it has too much cash? How about too little? 3. Agency Issues [LO3] Are stockholders and creditors as w uch cash a firm should keep on hand? 13. Float [LO1] An unfortunately common practice goes like this warning: don't try this at home): Suppose you are out of money in your checking account; however, your local grocery store will, as a convenience to you as a customer, cash a check for you. So, you cash a check for $200. Of course, this chock will bounce unless you do something. To prevent this, you go to the grocery the next day and cash another check for $200. You take this $200 and deposit it. You repeat this process every day, and, in doing so, you make sure that no checks bounce. Eventually, manna from heaven arrives (perhaps in the form of money from home), and you are able to cover your outstanding checks