Question

Which one of the following is a working capital decision?-How should the firm raise additional capital to fund its expansion?-What debt-equity ratio is best suited to the firm?-What is the cost of debt financing?-Should the firm borrow money for five or for ten years?-How much cash should the firm keep in reserve?

Answer 1

Answer:

How much cash should the firm keep in reserve is a working capital decision.

Explanation:

Working capital is the capital available for day to day running of a company. The amount of cash that a firm keeps in reserve is a working capital decision. The cash is used to finance the daily operation of the company.