16. A cash balance held in reserve for unforeseen fluctuations in cash flows is

Question

16. A cash balance held in reserve for unforeseen fluctuations in cash flows is called a balance a. transactions b. compensating c. precautionary d. speculative e. lockbox 17. Which of the following is true of the degree of operating leverage (DOL)? a. The higher the DOL, the closer the firm is to its financial breakeven point b. The higher the DOL, the lower the financial risk of the firm. c. The lower the DOL, the higher the operating risk of the firm. d. The higher the DOL, the closer the firm is to its operating breakeven point e. The higher the DOL, the higher the percentage increase in the sales.

Explanation / Answer

Ans16 (C)

Precautionery cash Balance are those cash balance that are kept in reserve for unforeseen future.

Ans 17 (d)

Higher the operating leverage means firms closely to its breakeven point.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.