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Respond to the following questions: What are the two principal reasons for holding cash? Explain in detail

Finance

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Respond to the following questions:

1. What are the two principal reasons for holding cash? Explain in detail.
2. Can a firm estimate its target cash balance by summing the cash held to satisfy each of the two principal reasons? Explain.
3. Explain the cash conversion cycle. How is it linked with working capital?

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