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Excess cash invested in cash alternatives is said to create:
ALoyalty
BLongevity
CLegality
DLiquidity
Answer & Solution
Correct answer: D. Liquidity
1. It can be tapped when needed.
2. Operating cash flow may fall short.
3. It creates liquidity.
_Source: OpenStax Principles of Finance 2e, Chapter 19, The Importance of Working Capital._
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