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What are three motives for domestic firms to hold cash? Be brief. What is the goal...

  1. What are three motives for domestic firms to hold cash? Be brief.
  2. What is the goal of EOQ model? Be brief
  3. What is the goal of JIT?  Be brief
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Answer #1

1.Three motives to hold cash are

1. Provide short term Liquidity

2. Less probability of default risk

3. Buying back it's shares from market

2. Economic order quantity is the level of quantity a firm should order in order to have minimum carrying and ordering cost.It provides with the optimum level to place order

3.Just in time method is designed so that product are not kept idle and resources are not wasted so they should be ordered as and when required. The goal of JIT is no wastage of resources and less of opportunity cost .

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