Purchase Solution

advantages & disadvantages of holding a large amount of cash

Not what you're looking for?

Ask Custom Question

What are the advantages and disadvantages of holding a large reservoir of cash?

Purchase this Solution
Solution Summary

This solution outlines the advantages & disadvantages of holding a large amount of cash.

Solution Preview

Hi there,

Advantages:

- Choice - having excess cash reserves gives the company a range of choices to do many things with that excess cash. They could invest in new technologies to create future growth, they could give back some of that excess cash to shareholders in the form of dividends or they could use that excess cash to generate interest. ...

Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

View More Free Quizzes
Related BrainMass Solutions

  • Holding Too Much Cash

    As a result, the amount of cash held by the company has increased to levels never experienced before. An evaluation by the company's financial staff concludes that the company is holding too much cash. This situation is reported to the stockholders.

  • Corporate Finance - Excess Cash Management

    What are the advantages and disadvantages of this use of excess cash? This is really a capital structure decision.

  • Advantages and disadvantages of project financing

    337499 Advantages and disadvantages of project financing What is project financing? What are its advantages and disadvantages?MBA level The general understanding of project financing is to commit money to earn a financial return or profit.

  • Investing

    Please provide information on the advantages and disadvantages of investing in the following accounts. Checking account: The advantages of a checking account are that you have unfettered right of withdrawal to your cash.

  • Lease - Advantages & Disadvantages

    320587 Key advantages and disadvantages from the point of view of the leasing company? What are the key advantages and disadvantages of leasing from the point of view of the leasing company?

  • Acme's Greenfield investment: Financial aspects of Acquisition

    This will create a strain on the resources of Acme, especially because the interest has to be paid in cash. In addition, when the bonds mature the principal amount will also have to be paid in cash.

  • Outsourcing: Pros and Cons

    Because outsourcing creates jobs elsewhere while it generally decreases the available jobs in the domestic country, outsourcing is often seen as a negative. When large companies outsource, they're usually subject to a high amount of public scrutiny.

  • Long term debt firm

    316917 Long term debt firm Why does a firm use long-term debt? The week 3 lecture points out advantages and disadvantages of long term debt. Do the advantages of long-term debt outweigh the disadvantages?

  • Advantages and disadvantages to issuing debt vs equity

    The interest amount paid towards debts is also ax deductible. Disadvantages of Debt Financing The disadvantage of debt financing is to maintain the sufficient cash flow for repaying the amount.

View More Related Solutions