Which of the following is NOT a precautionary motive for holding cash?
A)Anticipated funds to be remitted from several Middle East countries are in question due to unrest in the region.
B)The firm has several short-term obligations in unhedged foreign currency-denominated contracts.
C)The firm must pay ordinary wages in two days.
D)All are precautionary motives.

Question

Quizplus · Accepted Answer

Paying ordinary wages in two days is not a precautionary motive for holding cash, as it is a regular and expected business expense that can be planned for in advance. The other options are all precautionary motives, as they involve uncertainty or potential risks that may require the company to have cash on hand to manage unexpected events.

Which of the Following Is NOT a Precautionary Motive for Holding