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- true or false: financial managers should want to slow down disbursements.Explain how each of the following factors would probably affect a firm’s target cash balance if all other factors were held constant. d. The firm arranges to use an overdraft system for its checking account.Explain how a financial manager may be able to use the cash flow breakeven to plan their financing needs in the future.
- Which among the following is not recommended for solving cash problems of a business? a.Arrange for overdraft facilities in case a shortage is forecasted b.Allowing extra time to customers to pay off bills so as to boost the sales. c.Finding a cheaper source of supply of raw materials d.Disposing off assets that are not being put to effective useWhich of the following is not considered an effective cash management strategy? Multiple Choice Planning expenditures. Delaying payment of liabilities until the last possible day. Retaining excess cash for unexpected expenditures. Keeping only necessary assets. Encouraging collection of receivables by offering discounts for early payments.Explain how commercial bank mange it balance sheet to maximize its profit without affecting the liquidity.
- Liquidity means having access to ready cash, including savings and credit, to cover unexpected expenses. In managing your liquidity, you must consider the following: management deals with the decisions about how much credit you need to support your spending and which sources of credit to use. management deals with deciding how much money to retain in liquid form and how to allocate the funds among short-term investment instruments. A Credit; Money B Cash; Debit C Money; Credit D Credit; Debit Debit; CreditThe company can repay its debt or invest if: O a. the opening cash balance plus the cash receipts is less than the cash needed for disbursement in the budget period O b. there is a cash deficiency in the budget period. Oc. None of the given answers. O d. the cash needed for disbursement is less than the total of the opening cash balance plus the cash receipts in the budget period e. total cash available is less than the cash needed for expenditure in the budget period.Which of the following is a reason that banks may favor fee compensation over balance compensation? Balance compensation is not as visible as fees for budgeting purposes. The strategy involves attracting deposits to fund their loans. Earning credits used to determine the value of collected balances are taxable. Deposit balances increase liabilities on the balance sheet.
- With respect to disbursements, a company can manage their cash more efficiently by __________. a.) paying with cash b.) using lockbox banking c.) minimizing float time d. making use of creditElectronic funds transfers (EFTs) are decreasing used by companies due to the inconvenience and high-cost.true or false?Fena Company has experienced a stochastic demand for its product, which results in fluctuating cash balances randomly. Determine the optimal cash balance, and average cash balance. check the attached photo for additional info
