Question
Explain how each of the following factors would probably affect a firms target cash balance if all other factors were held constant. (3 pts) The
Explain how each of the following factors would probably affect a firms target cash balance if all other factors were held constant. (3 pts)
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The firm institutes a new billing procedure that better synchronizes its cash inflows and outflows.
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The firm develops a new sales forecasting technique that improves its forecasts.
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The firm reduces its portfolio of U.S. Treasury bills.
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The firm arranges to use an overdraft system for its checking account.
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The firm borrows a large amount of money from its bank and also begins to write far more checks than it did in the past.
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Interest rates on Treasury bills rise from 5% to 10%.
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