Indicate whether the following actions increase, decrease, or cause no change in a company's cash balance.
a) Interest rates paid on money-market securities rise.
b) Commissions charged by brokers increase.
c) The compensating-balance requirement of a bank is lowered.
d) The cost of borrowing decreases.
e) The firm's credit rating declines.
f) Direct fees for banking services are established.
1. It will reduce the cash balance as the there is cash outflow.
2. It will reduce the cash balance as the there is ...
The solution discusses the impact on Company's Cash Balance.