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There could be many reasons for a company wanting to hold cash. They might be in acquisition mode and be negotiating to buy equipment or other companies. The company may require the cash for cash flow purposes in the near future. The company may have plans to pay the cash out as a dividend in the near future. Holding cash however can be dangerous because in some cases it makes a company vulnerable to a takeover bid, or the company may miss out on investment opportunities that could bring the company additional return.
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What are the main motives for holding money?
The main motives for holding money are transactions, precaution, and speculation. The transaction motive relates to the need for money to facilitate everyday purchases and expenses. The precautionary motive involves holding cash for unexpected expenses or emergencies. Finally, the speculative motive refers to retaining money to take advantage of potential investment opportunities or to avoid losses in uncertain market conditions.
Why does a high interest rate discourage people from holding their money in cash?
They can earn interest on the cash if it is invested.
What are the cost and benefits of holding cash?
Benefit of holding cash is that it can be use in emergancy needs as well as it can be invested in some marketable securities or profitable investment activities while if less or not excess cash maintain then it can be harm the overall operations of business as in case of emergancy or in case of profitable investing opportunities if cash is not available those opportunities may be not avail by company so there are cost and benefits for having no cash or too much cash so it is the duty of financial managers to find the optimal between no cash and too much cash in hand.
What are the primary reasons that companies hold cash?
A company holding too much cash would be giving up the opportunity to invest more in income producing assets.
What are the factors that determined or influences the transaction motive of money?
The transaction motive for holding money is primarily influenced by the need for liquidity to facilitate everyday purchases and expenses. Factors include the frequency of transactions, income stability, and the overall level of prices in the economy. Additionally, individual preferences for consumption and the availability of credit can also impact how much money people choose to hold for transactions. Economic conditions, such as inflation and interest rates, further shape these motives by affecting purchasing power and the opportunity cost of holding cash.
Motives of holding cash?
1 - Transaction motive 2 - Precautionary motive 3 - Speculative motive
What are motives for holding cash?
There could be many reasons for a company wanting to hold cash. They might be in acquisition mode and be negotiating to buy equipment or other companies. The company may require the cash for cash flow purposes in the near future. The company may have plans to pay the cash out as a dividend in the near future. Holding cash however can be dangerous because in some cases it makes a company vulnerable to a takeover bid, or the company may miss out on investment opportunities that could bring the company additional return.
What are the three motives for holding money according to Keynes' theory of money demand?
1.Transaction motives: To make payments or purchases 2.Precautionary motives: To meet unforseen contingencies 3.Speculative motives: It being the safest asset in wealth portfolio. Other assests possess uncertainty and no liquidity.
Why does high interest rate discourage people from holding their money in cash?
They can earn interest on the cash if it is invested.
Why does a high interest rate discourage people from holding their money in cash?
They can earn interest on the cash if it is invested.
Who is responsible for holding the petty cash fund?
An Accountant or Accounts clerk is typically responsible for Petty Cash,
What is the classification of motives by hilgard?
Hilgard categorized motives into survival motives, social motives, and ego-integrated motives.
What are the cost and benefits of holding cash?
Benefit of holding cash is that it can be use in emergancy needs as well as it can be invested in some marketable securities or profitable investment activities while if less or not excess cash maintain then it can be harm the overall operations of business as in case of emergancy or in case of profitable investing opportunities if cash is not available those opportunities may be not avail by company so there are cost and benefits for having no cash or too much cash so it is the duty of financial managers to find the optimal between no cash and too much cash in hand.
What is the journal entry for parent company paid rent to holding company?
Parent company journal entry Debit cash | Credit accounts payable - rent Holding company journal entry Debit accounts receivable - rent | Credit cash
What are the three motives for holding money according to Keynes's theory of money demand?
1.for transactionary motive 2.for precautionary motive 3.for speculative motive.
Can a business owner holding a check from the business make a check payable to cash and cash it at the bank?
yes no mabey......im only fourteen...lol...in ur face
What are the primary reasons that companies hold cash?
A company holding too much cash would be giving up the opportunity to invest more in income producing assets.
