Final answer:
Firms invest their temporary cash surpluses in liquid and low-risk investments such as money market funds, short-term bonds, and treasury bills to ensure easy access to funds for future investments in equipment and facilities.
Step-by-step explanation:
Firms that have a temporary surplus of cash seek to invest this capital in ways that can be easily liquidated or converted back into cash when needed, while also providing a return on investment in the interim. When business owners choose financial capital sources, they consider various short-term investment options such as money market funds, short-term bonds, treasury bills, or even high-interest savings accounts.
These options provide liquidity and are generally lower risk, allowing firms to have access to their funds when they decide to reinvest in new equipment, facilities, or other long-term financial projects, which are critical for sustaining and fostering economic growth.