Working Capital Management Flashcards

1
Q

A motive of a firm to hold cash to facilitate normal transactions of the business

A

Transaction motive

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2
Q

A motive of a firm to hold cash beyond the normal operating requirement to provide for buffer against contingencies

A

Precautionary motive

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3
Q

A motive of a firm to hold cash to avail of profit-making opportunities

A

Speculative motive

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4
Q

A motive of a firm to hold cash as required by contracts or covenants

A

Contractual motive

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5
Q
A
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