Firms are motivated to improve cash flow EXCEPT by: Having the cash necessary to
ID: 2724609 • Letter: F
Question
Firms are motivated to improve cash flow EXCEPT by:
Having the cash necessary to perform daily operations.
Increasing cash balances in non-interest bearing checking accounts.
Increasing short-term investment of cash surpluses.
Minimizing short-term borrowings in the event of cash deficits.
True or False _____Firms are motivated to slow collections float and expedite disbursement float.
True or False_____Opportunity cost includes maintaining idle balances dispersed across many accounts at multiple banks which ties up cash.
A firm that has small daily cashflows, minimal computer facilities, and untrained treasury personnel, would tend to use a disbursement system that is:
Manual and paper-based.
Automated and ACH-based.
Electronic with a focus on wires for funding.
None of the above.
Explanation / Answer
The correct answer is option (B). Increasing cash balances in non-interest bearing checking accounts.
The statement is True. Firms are motivated to slow collections float and expedite disbursement float.
The statement is True. Opportunity cost includes maintaining idle balances dispersed across many accounts at multiple banks which ties up cash.
A firm that has small daily cashflows, minimal computer facilities, and untrained treasury personnel, would tend to use a disbursement system that is manual and paper based. The correct answer is option (A).
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